Life Insurance for People with Schizophrenia
In this article, we wanted to take a moment and try and answer some of the most common questions we get from folks either looking to purchase a life insurance policy on themselves after they have been diagnosed with Schizophrenia or looking to buy a life insurance policy on a family member who has been diagnosed with Schizophrenia.
Questions that will be directly addressed will include:
- Can I qualify for life insurance after I’ve been diagnosed with Schizophrenia?
- Why do life insurance companies care if I’ve been diagnosed with Schizophrenia?
- What kind of information will the insurance companies ask me or be interested in?
- What can I do to help ensure that I get the “best life insurance” for me?
So, without further ado, let’ dive right in!
Can I qualify for life insurance after I’ve been diagnosed with Schizophrenia?
Unfortunately, Schizophrenia is one of those “type” of pre-existing medical conditions, which will usually prevent someone from being able to qualify for a traditional term or whole life insurance policy.
Once it has been determined that you do have Schizophrenia or that you have been prescribed a medication used to treat Schizophrenia most (if not all) of the best life insurance companies will pretty much AUTOMATICALLY decline one’s application.
Why do life insurance companies care if I’ve been diagnosed with Schizophrenia?
Despite the fact that Schizophrenia isn’t really considered a “life-threatening” disease, statistical data does seem to indicate that both men and women who do suffer from this condition do tend to experience a lower life expectancy.
This occurs is something that doctors and medical researchers can debate but what is generally agreed upon is that folks who do suffer from Schizophrenia will also struggle with other “aspects” of life that most life insurance companies will look at when determining who they will and won’t insure.
Aspects such as:
- Maintaining a healthy lifestyle,
- Holding down a steady job or successfully running one’s own business,
- Being able to care for one’s self,
- Avoiding any potential legal issues (Hallucinations and/or “episodes” will often attract the attention of law enforcement),
- Having and maintaining a good driving record (when applicable),
- Avoiding any drug or alcohol abuse (Symptoms of Schizophrenia are often exacerbated by drug and alcohol use),
Which is why…
Even though Schizophrenia may not be “life-threatening,” the symptoms and complications commonly associated with this disease are those that will often cause any individual to be denied traditional life insurance coverage, regardless of any type of pre-existing medical condition such as Schizophrenia.
What kind of information will the insurance companies ask me or be interested in?
Given the fact that most (if not all) life insurance companies are going to automatically decline anyone who has been diagnosed with Schizophrenia, you’re probably not going to be asked a whole bunch of questions about your condition seeing how it’s not really going to matter.
The good news is…
That here at I&E we spend an incredible amount of time creating relationships with dozens of different life insurance companies so that we can minimize the number of times we have to apologize to a client that we just don’t have any options that they will be able to qualify for.
This is why…
Where other agencies may inform you that you just can’t qualify for a life insurance policy because of your Organic Brain Syndrome diagnosis, we prefer to ask you three simple questions that could determine whether or not you might just be able to qualify for a Guaranteed Issue Life insurance policy.
Those three questions are:
- #1. Are you a US Citizen?
- #2. Are you between the ages of 50 (sometimes 45) and 85?
- #3. What state do you live in?
What options might be available to me?
Now at this point, it’s important not to get too excited because while it is true that some folks may be able to qualify for a Guaranteed Issue Life Insurance policy or maybe even an Accidental Death Policy, it’s important to understand that just because you “can” qualify may not mean that you’ll “want” to qualify.
The reason for this…
Is because while these “types” of products may meet the needs for some, they are going to have some pretty serious disadvantages that may be a “deal-breaker” for some. Which is why after reading what we’re about to discuss we would invite you to then give us a call or visit one of our other articles that will go into greater detail about these “alternative products” so that you’ll know exactly what you are “getting” should you decide to ultimately purchase one of these “types” of products.
Accidental Death and Guaranteed Issue Life Insurance Policies Defined
Accidental Death Policies
Here at I&E, we tend to think that when explained properly, Accidental Death Policies tend to be a bit easier to understand than Guaranteed Issue Life Insurance Policies, which is why we want to begin by discussing exactly what an Accidental Death Policy is.
The problem is…
That a lot of times, these “types” of products aren’t fully explained or more commonly aren’t explained in a way that specifically points out what these types of policies won’t provide coverage for. This is why we here at I&E, want to begin our discussion of an Accidental Death Policy by specifically stating that these “types” of policies are NOT TRUE LIFE INSURANCE POLICIES.
This is why…
You don’t need to be a licensed life insurance agent to sell them and why they aren’t going to provide you with any coverage in the event that you die of a “natural” cause of death.
Now at this point…
You may be asking yourself…
“What do you mean by NATURAL CAUSE of death?”
When we use the term “natural cause of death” we’re referring to an “illness-based” death as you would experience as a result of:
Or from some kind of health related complication that one might experience as a result of suffering from Schizophrenia.
These types of products…
Are only going to provide a death benefit to your family if you die from an accidental cause or any cause of death that isn’t “illness based”. Examples that would typically qualify as an Accidental Cause of death would typically include:
- A motor vehicle accident,
- A slip and fall accident
- A natural disaster,
- Victim of crime,
Which is nice…
But usually, this isn’t what someone is looking for after they have been diagnosed with Organic Brain Disease. On the plus side, these “types” of products are generally pretty affordable. They will allow someone to purchase a large amount of ACCIDENT insurance for a relatively small amount of money. This brings us to our next possible option, which is a…
Guaranteed Issue Life Insurance
A Guaranteed Issue Life Insurance policy, on the other hand, is A TRUE LIFE INSURANCE PRODUCT. This means that you do need to be a licensed life insurance agent to sell them, and “ultimately,” they will provide an individual true-life insurance coverage. Now we say “ultimately” because when you purchase a Guaranteed Issue Life Insurance Policy, you’re purchasing a life insurance policy that has a “catch” to it.
In our experience here at IBUSA we’ve found that the best way to discuss these types of life insurance policies is by analyzing the three major disadvantages that these “types” of life insurance policies have aside from the fact that you generally have to be over the age of 50 and live in a state where these “types” of life insurance policies are available.
So, let’s dive right in…
Guaranteed issue life insurance policies are only going to provide a limited amount of life insurance coverage and will usually “cap out” right around $25,000 dollars in coverage.
This means that if you’re looking to purchase more than $25,000 in coverage a guaranteed issue life insurance policy might not be right for you!
(Yes, individuals can purchase several different guaranteed issue life insurance policies from several different companies, but as we will now discuss, this can get expensive).
Dollar for dollar, guaranteed issue life insurance policies aren’t always the most affordable when compared to other “types” of life insurance policies out there. Now we don’t want to imply that these “types” of life insurance policies are going to cost a fortune, it’s just that if you can qualify for another “kind” of life insurance policy, that coverage will usually cost less dollar for dollar than a guaranteed issue life insurance policy will.
Guaranteed issue life insurance policies contain a clause most commonly referred to as a Graded Death Benefit.
Graded Death Benefit Defined:
Graded Death Benefits are “clauses” written into most (if not all) guaranteed issue life insurance policies which state that a guaranteed issue life insurance policy won’t begin to cover an individual from “natural causes” of death until a certain waiting period has elapsed. This “waiting period” will usually last 2 to 3 years and is designed to make sure that someone who knows that they are very close to death from being able to purchase these “types” of life insurance policies.
This may seem incredibly unfair; it’s important to remember that a guaranteed issue life insurance policy isn’t going to require you to take a medical exam or answer any health-related questions. So, a graded death benefit is the only thing that allows an insurance company to offer one of these “types” of life insurance policies.
The good news is…
That while you may have to wait for 2 to 3 years for one a Guaranteed Issue Life Insurance policy to provide you true life insurance protection, these “types” of life insurance policies will provide immediate coverage for any “accidental causes” of death and may also provide some kind of “return of premium” to the beneficiaries insured applicants who do end up dying from natural causes before their Graded Death Benefit expiring. So, it’s sort of like buying a small Accidental Death Policy that will ultimately “turn into” a true-life insurance policy after a period of time.
So, have we confused you yet?
If so, don’t fret we the purpose of this article wasn’t to try to make you an insurance expert, it was just to give you an idea of what questions you’ll want to pursue prior to making any decisions. This brings us to the last topic that we wanted to discuss here in this article, which is…
What can I do to help ensure that I get the “best life insurance” for me?
In our experience here at I&E, what we have found that works best for folks who have been diagnosed with a pre-existing medical condition where the “severity” of the condition is often “subjective” is for the applicant to make sure that they first find a true-life insurance professional who will work as an advocate for you.
Such an agent…
Will not only help guide you through the application process but also be perfectly “frank” with you about what options may or may not be possible for you.
You’ll also want to make sure that the very same agent you have chosen has access to dozens of different life insurance companies because after all, it doesn’t matter how “great” of a life insurance agent you might have if they don’t have access to the “best” life insurance policy for you!
Now, does it?
You’ll want to make sure that you’re completely honest with your life insurance agent before applying for coverage. By doing so, you will be helping him or her narrow down what options might be the “best”
So, what are you waiting for? Give us a call today and see what we can do for you!