A lot of people think that insuring kids is one of the easiest things in the world. And yes, in many cases it is a simple process. However, when looking for life insurance for children with a pre-existing condition it gets a little more challenging. As a parent, it breaks my heart knowing that a child is battling an illness and I always admire the family’s strength. At One Stop Life Insurance, we made it our mission to find the best and most affordable options to secure a life insurance policy. In this post, we will go over why carries are more hesitant underwriting a policy for a child with a pre-existing condition; what are your options and what to expect.
If you have any additional questions or concern not covered in the post, please feel free to reach out to us. You can contact us via e-mail or by phone. Also, you can complete the information for an instant quote.
Why can life insurance for children with a pre-existing condition be tricky?
Basically, there is simply not enough data. Life insurance companies hire a team of underwriters, actuaries, health experts just to be able to “predict the future” based on past knowledge. When working with children, there may not be enough history of the illness to be able to form an accurate expectation. The condition can worsen or best case scenario, the child can outgrow it and have no more symptoms for the rest of his or her life. This uncertainty makes it more difficult for the life insurance companies to underwrite the application.
What are your options when researching life insurance for children with a pre-existing condition?
Regardless of your child’s condition whether it may be cancer, diabetes, epilepsy, or something else you have options. You can rest assured that we will do the best we can to help you secure coverage for your little one.
The first and more well-known option is to purchase an individual policy. This has its positives and of course its drawbacks. Getting your child a policy means that you don’t have to worry that they will be uninsurable in case their condition worsens. In other words, you will have the peace of mind that they are covered for the rest of their lives, as long as the premiums are paid. This option allows you to select a higher coverage amount. Another benefit is that fact that you are locking in that rate for the rest of your child’s life.
Example, if you son is 5 years old you could secure a $100,000 policy on him for as little $330 per year. Just consider that the same type of policy at age 35 will cost him nearly $1,000 per year assuming he qualifies for a standard non-tobacco rate.
Also, there are types of policies that you can pay off in as little of 10, 15 years and your child or grandchild could have a completely paid-up policy to last them a lifetime.
A major drawback of this option is that not every child could qualify. The life insurance carriers will ask a series of health questions to determine eligibility.
In case your child in uninsurable due to a pre-existing condition, we have another option for you. You can add him or her as a rider on your policy.
Please keep in mind that the child’s rider can be added only at the time of application. Meaning, you would need to get a policy on yourself and add the option to have your child/children covered.
The 2 major advantages of this option are price and the fact that all children living in the household could be covered.
For example, typically a child rider cost about $5 per year per $1000 in coverage. If you would like to add $10,000 in coverage, you are looking at $5×10 or $50 per year in total cost. This is the total cost, regardless of the number of children you have in your household.
With that being said, there are some negatives to this option as well:
- Typically, a rider offers a relatively small amount of coverage – up to $20,000.
- Usually, once your child turns 25, or the insured’s 65th birthday, whichever happens first, the rider will cancel. This means that most companies may allow the option to convert it to an individual policy at the current rate.
What will the companies want to know when underwriting life insurance for children with a pre-existing condition
The answer to this question varies based on the condition. Typically, life insurance companies will need to know the following information:
- When was the child diagnosed with the condition;
- Current course of treatment, if any;
- List of prescribed medications and dosage;
- Readings of the past exams or tests;
- Name and contact information of primary care physician;
- Are there any surgeries scheduled or already performed and etc.
Please make sure you have this information available, as it will speed up the application process.
What else the companies are looking at when reviewing a life insurance application on a child
- The first thing that the companies will ask is what is the life insurance coverage on the parents. Please have your insurance information available.
- Every child in the household needs to have similar coverage – the life insurance companies want to see that every child has the same amount of coverage. If you want to purchase different coverage amounts for the different children, please prepare to submit the reasoning behind it.
- Typically, the maximum coverage amount for children is $250,000. Life insurance companies are able to make an exception to this rule. However, they will need an explanation as to why you need a higher coverage amount.
There are few things to consider when looking for life insurance for children with a pre-existing condition. The main thing is that you have options. Do not hesitate to reach out to us and get advice. At One Stop Life Insurance, we work on your behalf to find the best product out there for your family.