Guaranteed Issue Life Insurance

Obtaining life insurance with diabetes can be a monumental task. If you are a diabetic, I do not need to remind you how important it is to control your disease and the consequences of not doing so.

The insurance carriers are also well aware of the possible negative outcomes, and are very reluctant to issue health insurance to a diabetic.

However, I do not want you to be discouraged. There are various ways that you can obtain life insurance. We will discuss those avenues in this article.

Q. What if my diabetes is controlled?

A. Most people are able to control their Diabetes with oral medication, diet and exercise.

In the past, diabetes was considered a completely uninsurable condition. The companies were not even bothered to check the application at all.

A legitimate life insurance plan for a diabetic would be impossible to obtain.

Today, there are certain carriers that are a bit more liberal with their underwriting.

Specifically, they will consider a non-insulin diabetic who is controlled with oral medication and/or diet and exercise. In addition, you cannot have any other medical issues.

While this seems to be a somewhat narrow guideline, we have been able to write a large number of diabetics with complete major medical life coverage plans.

The carriers do "rate up" or charge a somewhat higher premium. But, it is a way to obtain a complete major medical plan at a reasonable premium.

Q. What if I don't meet the criteria?

A. If you do not meet the aforementioned criteria, there are still other ways to obtain coverage. But, you must obtain a Guaranteed Issue health insurance plan.

Guaranteed issue, when used in connection with life insurance, means that a plan will be offered regardless of medical condition.

Group health is the most common form of guaranteed issue life coverage, but some states offer guaranteed issue plans on the individual market as well.

Those who have become HIPAA eligible are also entitled to guaranteed issue plans.

It is important to keep in mind, however, that just because a plan is guaranteed issue; it doesn't mean that there aren't certain requirements that must be fulfilled before one is offered.

In the case of group health insurance, there may be waiting periods of up to 90 days, and in the case of HIPAA eligibility, often one must exhaust very costly COBRA benefits.

Q. What if I work for a company?

A. If you work for a company that offers life insurance, your problem may be solved, as group life coverage plans are what was known as guaranteed issue which means that you are not required to medically qualify for it.

If you do not have group coverage available or you do not live in one of the few states that mandates guaranteed issue health insurance (i.e., New York, New Jersey, etc.), then you need to find such a plan on your own.

Q. Are there any affordable insurance plans for me?

It is unfortunate that there are so many salespeople (licensed and unlicensed) who will try to sell you a plan that for all practical purposes, is useless.

You need to be a particularly careful consumer when buying a guaranteed life insurance plan.

Let me say from the outset that the plans you find will not, in most cases, cover testing supplies or syringes. Those items will still be your personal expense.

If you are on a limited budget, we recommend either a good indemnity or mini-medical plan. The mini-medical is a little more expensive but will provide co-pays for office visits as well as brand name prescriptions and is HIPAA qualified.

The Health Insurance Privacy and Accountability Act (HIPAA)

Q. What is HIPAA?

A. A raft of legislation was passed during the Clinton administration and was designed to accomplish five major goals:

  • Ensure continuity of benefits when an employee goes from one employer to the next. This means that if someone switches jobs, a new employer preexisting conditions must be covered if they were covered by the old employer.
  • Restrict to only twelve months the amount of time preexisting conditions can be excluded from coverage if they were not covered by a prior employer
  • Mandate that states make coverage available, without exclusions for preexisting conditions, to those who have exhausted their COBRA benefits.
  • Set privacy requirements for health care providers
  • Prohibit hiring discrimination on the basis of health conditions.

Not all states implement their HIPAA requirements in the same way. When a person has exhausted COBRA benefits and has met certain other criteria, that person is said to be HIPAA eligible.

States are required by federal law to make health insurance available to that individual. In some states, that might mean joining the state risk pool, and in others it might mean getting a HIPAA eligible plan through a private company.

It is important to understand that in many states, companies are free to charge as much as they wish for those who are HIPAA eligible.

Those states who offer their risk pool for those who are HIPAA eligible often have set limits on how much they will charge (usually 200% of a comparable plan on the open market).

Generally speaking, to be HIPAA eligible, one must:

  • Have had ongoing 'creditable coverage' for 18 months with no gap for a period of over 63 consecutive days
  • Have had their last day of coverage with a group plan
  • Not be eligible for health insurance benefits through any other group plan, Medicare, or Medicaid.
  • Be without health coverage
  • For reasons other than failure to pay premiums or fraud
  • Have exhausted COBRA benefits, if they were offered

Q. Am I HIPAA eligible?

A. If COBRA was not offered, you are eligible for HIPAA from the day you lose your coverage (provided you've had insurance for the last 18 months). You might not have been offered COBRA if:

  • You end employment (or it is ended for you) and your employer has fewer than 20 employees.
  • The health insurance company used by your employer goes out of business
  • Your employer stops offering health insurance coverage

You may also wish to read about health insurance for a diabetic which is also a possibility.

They use a United HealthCare PPO network and it is the best plan of this type that we have come across. You could obtain full major medical health insurance, but this is much more expensive.

Plus, you must be employed at least 15 hours a week. It can be self-employment. This is a full $5 million dollar major medical plan.

I suggest you go find a specialist dealing with health plans for diabetics and speak with the marketing firm directly (or call them at 800-960-7702.

They are also very knowledgeable about life insurance plans for diabetics and can answer your questions.

If you meet income requirements, state-sponsored Medicaid programs may be available.

Q. What else do I need to know?

A. Most people do not realize that you might not initially meet the income guidelines, but, in the event that a hospital stay goes over a certain dollar amount in a given month, Medicaid would pick up the remaining expenses.

This means that a mini-medical or indemnity plan in conjunction with Medicaid could be a viable solution. Indemnity plans cost between $175 and $305 per month for an individual and can be found on the web.

Please come back to this website from time to time to read additional articles about guaranteed issue life insurance plans.

When something new becomes available, we update the database immediately.

All of the plans mentioned in this article can be found online.