Taking out life insurance as a type 2 diabetic [5 top tips]

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According to recent research up to 1 in 10 adults in the UK could have diabetes by the year 2030. 90% of all diabetics are diagnosed with type 2 diabetes, which is being driven by increasing levels of obesity within our population.

Simultaneously, the global COVID-19 pandemic has encouraged more and more people in the UK to consider taking out life insurance to protect their loved one’s financial future.

But how does having type 2 diabetes impact one’s ability to secure life cover in 2022? We asked leading insurance broker Reassured to examine the key considerations…

Life insurance and type 2 diabetes

For those living with type 2 diabetes, your condition shouldn’t be an obstacle in the way of securing the financial protection you need.

But having a pre-existing medical condition can highlight the need for having the right cover in place to protect your loved ones if you were no longer around to provide for them.

With over 90% of all diabetes sufferers in the UK living with type 2 diabetes, it’s extremely common for insurers to offer cover to those with the condition.

Below Reassured provides their top 5 tips for applying for life insurance as a type 2 diabetic.

But firstly, why is life insurance so important?

Life insurance can provide essential financial support when your loved ones need it the most. 

You pay a monthly premium and, if you pass away while your policy is active, a lump sum payout is made.

These funds can help loved ones to:

• Cover mortgage/rent payments
• Cover household bills
• Pay for additional childcare 
• Pay for your funeral
• Pay off outstanding loans/debts in your name
• Provide an inheritance

Diabetes life insurance – 5 top tips

1. Lead a healthy lifestyle

Leading a healthy lifestyle not only benefits the management of type 2 diabetes but can also help you to save money on your premiums.

Life insurance premiums are calculated by insurers based on how much risk you pose to them (how likely it is that a claim will be made).

If type 2 diabetes isn’t well managed it has the potential to cause many other health complications, ranging from heart conditions, nerve damage, and even dementia. For this reason, insurers often inflate the premiums of those with type 2 diabetes due to the increased risk.

However, this isn’t to say there aren’t steps you can take to lower the price you pay.

Medical information isn’t the only information taken into consideration during the application process. Insurers will also ask certain lifestyle questions – and this is where you could save a few pounds.

Those who don’t smoke, only drink alcohol on occasion, and, overall, lead a healthy lifestyle will pay less for their life insurance cover. So, if applicable to your lifestyle, quitting smoking and minimising your drinking could help lower the cost of your premiums.

Once your cover is in place it can also be possible to reduce the price that you pay over the lifetime of your policy as some insurers will reward well-managed type 2 diabetes with a reduction in premiums.

You’ll need to prove to your insurer that you’re taking steps to improve your condition so you may wish to keep an activity log and/or a food diary.

2. Have your medical details to hand

Insurers can ask for your permission to contact your GP to obtain medical records or, in rare cases, ask for you to undertake a medical exam.

When applying for life insurance with a pre-existing medical condition, insurers will need to gain a greater understanding not only of your condition but of your overall health.

As type 2 diabetes commonly develops as a result of other conditions, such as high blood pressure or obesity, insurers will need to know when you were diagnosed and what triggered the development of diabetes.

Insurers are likely to require the following details:

• Date of diagnosis
• BMI
• Symptoms
• HbA1c readings
• Medication
• How you’re managing your condition

Having these details, as well as any other relevant information, to hand can help to speed up the application process as it may reduce the need for insurers to contact your GP to obtain this information.  

3. Only take out the level of cover required

When taking out life insurance it can be tempting to take out as much cover as possible to financially protect your loved ones.

However, if you’re paying inflated premiums due to having type 2 diabetes, this may not be cost-effective for you. Paying inflated premiums for unnecessary cover can become extremely costly over the lifetime of the policy.

The level of cover you require can be calculated by adding together all of your financial commitments, to make sure everything is covered for your loved ones if you were no longer around. For example, could look like this:

Remaining mortgage balance + cost of raising child/children to 18 + living expenses

By doing this sum and talking through your needs with a life insurance expert, you can find the right level of cover for you and your family – and you won’t be paying over the odds for cover you don’t actually need.

4. Consider taking out cover through a specialist insurer

While it’s unlikely for you to be declined due to diabetes alone, there are still life insurance options available to those who have previously been declined.

Some mainstream providers aren’t well equipped to offer cover to those with pre-existing medical conditions, or other high-risk factors due to the increased risk of a claim being made.

However, there are insurers out there who specialise in offering cover to ‘non-standard’ applicants (known as specialist insurers).

These insurers can provide a simple way of securing cover if you’re a type 2 diabetic who’s struggled to find cover in the past.

However, not all mainstream providers have the same risk appetite so just because one has previously declined you doesn’t mean that they all will. Each insurer has a different underwriting process and the terms that they offer will vary.

For this reason, it’s beneficial to compare quotes from a range of providers. Using a broker, life Reassured can allow you to do this quickly and easily. Brokers work with a panel of insurers which often include both mainstream and specialist insurers.

5. Weigh up all of your options

There is still a wide range of life insurance options available to those with type 2 diabetes – don’t think you’re a lost cause due to your condition.

However, some policy types may be better suited than others.

As whole of life insurance lasts for the remainder of your life, you’ll be required to pay premiums until you pass away. If you’re paying inflated premiums due to your condition, this option could become very expensive in the long run.

If you want to guarantee your loved ones a payout (and you fit into the age bracket) you could opt for an over 50s plan instead. Cover lasts for life and you won’t need to provide any medical information as acceptance is guaranteed for those aged 50 – 85.

Alternatively, traditional term life insurance can still be affordable for those with type 2 diabetes. If your condition is well managed and no other high-risk factors are identified, it’s likely there will only be a minimal increase to your premiums.

It’s important to be aware of all of your options before taking out life insurance so that you secure the right policy to meet your needs (and fit within your budget).

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