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Diabetes and Life Insurance
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Life Insurance for Diabetics
What is Life Insurance?
Most of us don’t want to talk about the possibility of dying and leaving our spouse and kids with a stack of bills and only one income. If you have diabetes, you are acutely aware that your health very well may hang in the balance. This article is not intended to “sell” you on the need for life insurance. As an insurance agent and financial advisor, I have found that every individual with a mortgage and children living at home has a need for some life insurance.
Life insurance policies are contracts between and individuals and insurance companies to pay a set dollar amount on the death of the individual covered by the policy. The thing that scares insurance companies the most is not cigarette smoking, high cholesterol or diabetes – it is the uncertainty of how those diseases will progress over time. Keep in mind, that once you get life insurance, the rate will increase only by the specified amount (if a term plan) or not at all (if a permanent plan). These rates are locked in even if your health deteriorates over time.
Term Life Insurance will pay your beneficiaries a set amount as long as the policy remains in effect, which is generally 5, 10, or 20 years. If you choose a longer term, the premium will be higher, all other things being equal. The rate will increase at these time increments, and ultimately become unaffordable or simple terminate.
Many term plans offer the option of converting to a permanent plan at a future date with no evidence of insurability, that is, no new medical exam. You get to keep the same rating or classification, even if your health has deteriorated, and the length of the policy can be extended.
Permanent Life Insurance, such as Whole Life or Universal Life, has a higher premium, but some money is set aside in a conservatively invested account for the medium- or long-term. The premium on the permanent plan does not increase over time. There are other variants of permanent insurance such as Variable Life (where the money is invested in stock-type accounts) or Return of Premium plans which act a lot like Universal Life plans.