Did either of your parents smoke a pack a day for twenty years? How about your brothers or sisters — do any of them have a penchant for all things deep-fried? If you’re nodding your head right now, read on. Despite your model health habits, you may be the one who gets punished for your family’s misdeeds.
Arguably one of the most contentious (and many people would say unfair) components of life insurance underwriting is a family history of cardiovascular disease (CVD) and cancer. After all, it does seem unjust to be penalized for the misfortunes or lifestyle choices of our relatives. But like it or not, life insurance companies actively consider family history. And since there’s no use crying from the rooftops, we’re better off understanding what it is, how it works, and how it may affect your term life insurance rates.
There are two types of family history that life insurance companies consider. Let’s take a look at each one.
Family History of Cardiovascular Disease
A family history of CVD includes a range of conditions related to both the heart and vascular system.
- heart attack
- bypass surgery
- valve surgery
Family History of Cancer
Cancer history guidelines have evolved considerably over the past several years. Many life insurance companies have pared their lists of ratable cancers to just a handful. These typically include:
Also, companies such as Transamerica Life will not penalize applicants with a family history of gender-specific cancers. For example, a male applicant with a family history of ovarian cancer can still qualify for the best rating class. The same is true for a female applicant with a family history of prostate cancer.
Sometimes we see life insurance companies lift family history of cancer guidelines entirely. Two such companies are VOYA Financial (ReliaStar Life) and Banner Life. Neither company considers cancer history against applicants, regardless of cancer type or gender!
Life Insurance Company Guidelines
Life insurance companies have specific guidelines for family history, and they vary widely by company. In general, these guidelines apply to applicants under the age of 60 – 70. Before we can look at these guidelines more closely, we need to define a few terms life insurance companies use.
What is ‘Family?’ – Family members include natural parents and siblings. Some companies do not consider siblings’ history, only your parents.
What is ‘Occurrence?’ – This means your family member was diagnosed with or received treatment for the medical condition at any point before a certain age (usually 60 – 65).
What is ‘Death?’ – This means your family member died due to the specific medical condition before a certain age (once again, usually 60 – 65).
So, family members include parents and siblings. Sometimes it’s both and other times just parents. But it’s never just siblings. Also, we’re talking about blood relatives; so this applies to birth parents and siblings, as long as there is a blood relation.
Another important distinction to make is the one between an occurrence and death. As mentioned, occurrence just means your relative was diagnosed with or received treatment for the condition at some point. Death means a family member died precisely due to the condition. It’s important to know the difference because company guidelines vary based on occurrences and deaths. For example, one company may allow a Preferred Plus rating class if there was an occurrence prior to age 65, but another company will not.
In addition to differences in condition types and outcomes, life insurance company guidelines also vary by age. Take a look at the table below to see the role age plays for each company.
Family history comes with it’s gray areas as well. For example, some people do not know one or both of their birth parents. Others may not know the particular cause of death of a family member. Many people have trouble remembering the exact age their passed away or the exact age they developed specific medical conditions.
If you’re not sure of your family history, it may be best to gather as much information from other family members as you can before applying for term life insurance. And if that approach doesn’t prove fruitful, simply provide your agent or broker with the information you do have. It’s always best to be honest when submitting a term life insurance application and remove the risk of problems down the road.