17 Apr I have diabetes. My term life policy is ending. What next?

Q. I have a term life insurance that’s policy that’s about to expire. I can’t afford whole life. I would like to have extra coverage for five more years until my kids are done with college. Term rates will be more expensive this time because I’m older and I have diabetes now. What do you suggest?
— Need coverage

A. Life insurance will always cost more when you’re older. Having an immune disease doesn’t help.

But you do have options.

Start by looking at your current term policy to see if it has a “term conversion” option.

That would allow you to convert your term policy into some permanent plan without proving good health, said Ed Gaelick, a Chartered Life Underwriter and Chartered Financial Consultant with PSI Consultants in Glen Rock.

He said the insurance carrier would typically allow you to convert to whole life, universal life, variable life or other options.

“Let’s assume your policy does indeed have that option,” he said. “If your goal is to only extend your protection for five more years, I’d request illustrations on the lowest premium plan available for conversion with the emphasis on death benefit, not accumulating cash value.”

You may be able to extend your coverage at a premium you can tolerate, he said.

If your term plan does not have a conversion option, it is possible it can extend longer, as a term policy, Gaelick said. But, it would be at a much higher premium that would probably increase annually.

If neither are viable options, you’d need to re-apply for new coverage to that company or any of the dozens of other insurance companies that market and sell term life insurance.

“Yes, you are older so rates will be more but you’d likely need to have an exam which may include a blood and urine test,” he said. “Since the insurance company will know a lot about you after the exam, and if you are insurable, your term rates may favorably surprise you.”

He recommends you look for an annually renewable policy where rates will increase each year because it would only be for five years.

On the diabetes, Gaelick said it doesn’t help, but if it was adult-onset Type 2 diabetes, it will matter how well-controlled your sugar levels are.

How you control your diabetes – medication and diet – the level of your A1C, your height and weight will all play a role in the cost, Gaelick said.

“It’s always advisable to be completely open and honest with whomever is helping you,” he said. “Often an agent or broker can do some `filed underwriting,’ choosing the best insurance company for your circumstance and have a good sense for the outcome.”

Forget to disclose any important info and you’re likely to get an unfavorable underwriting decision, Gaelick said.

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This story was originally published on April 17, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.