Does Family History Affect Term Insurance Rates?

People often talk about diseases passed on by their parents or grandparents. Many people discover they have an underlying disease when they go for their routine check-ups. While diseases and chronic conditions are not always inherited, the odds are high when there is a history associated. Hence, their family history plays a significant role in examining the health condition of an individual.

Family history and term insurance

When an individual purchases a term policy, they get a life cover for a specific tenure. The insurance companies realise that a person’s health directly affects their longevity. They examine the health of an individual before quoting the rates and premiums to them. Many people prefer getting their medical tests done for term insurance to know about their current health condition. Any factor that affects your health should be known by your insurer. One such significant factor is your family history.

The three aspects of family history that influence term insurance are –

Hereditary conditions

It has been proven that several diseases and chronic health conditions have a genetic association. They can be transmittable amongst families, mostly from parents to children. Usually, several insurance companies consider the family history of illnesses such as cancer, heart conditions, kidney-related issues, diabetes, and lung diseases.

The average lifespan of a family

There have been cases where either one or both parents are no more because of a critical illness. In such cases, there is a tendency that the children may inherit the same illness. Insurance companies take into consideration this possibility when they draft the policy of that individual.

Family environment

The environment in which a family lives reflects the quality of their life. Poor living conditions increase the risk of infectious diseases and contagious illnesses. The insurance company examines the living conditions of an individual to ensure that they met the basic hygiene and cleanliness standards.

If an individual has any of the above factors and wants to purchase term insurance, the insurance company may treat their file differently. Depending upon the severity of the case, here are the three possible steps an insurance company might take –

Charge higher rates

Some insurance companies may offer term insurance to individuals with chronic health conditions. However, in such cases, they might charge higher rates to compensate for the risk associated with the policy.

Offer limited coverage

When a company is drafting the terms and conditions of an individual’s policy, they might add specific clauses to the policy. In these clauses, they clarify beforehand that they offer no coverage if the individual has succumbed to the critical illness that is linked with the family history. The company covers the individual in any other scenario apart from the critical illness mentioned in the clause.

Deny insurance cover

In rare cases of chronic illness coupled with a low life expectancy, the insurer cannot provide term insurance. Providing insurance to such clients might be a risky financial move.

Hiding family history

It is not wise to hide facts of your family history from your insurance company. There are serious repercussions one might face for withholding such information. When the insurance company examines the demise of an individual, any undisclosed facts may cause rejection of the claim. It is a worst-case scenario, as it may severely affect the finances of your loved ones. Term insurance provides life cover and financial security to your loved ones in your absence. Hiding your family history might jeopardise your family’s future and cause unnecessary problems.

When you are buying a term policy, contact your family members and gather all information about your family’s medical history. There are cases where one might be unaware of the medical history of their family. Insurance companies understand such exceptions. As family history is not the only factor, you can get a medical test done for your term insurance. This will let the insurer know your current health status and charge rates accordingly. You can also use a term insurance calculator online to get an estimate of your rates and premiums.