Diabetic life insurance made simple, then complicated, then simple again

Phil was gracious enough to let me use some of his information for this article. He had been looking for life insurance and I told him I would use him as a case study to get some quotes from a couple of life insurance companies and then explain what was going on and how these translate into policies. Nothing is spared not even the names of those companies. If you have questions, I’ll answer them about the companies as honestly and with as much detail as possible.

First the information that I submitted..

PI, male, 48 y/o, Washington, 6'2", 185#
diagnosed @ 12 with type 1 diabetes. most recent a1c 6.2. Uses pump. is a counselor and coach and diabetic instructor.
no complications - good family history
Interested in $250k

I had to guess on his height and weight but this is mostly hypothetical and we really want to just see the process. The quotes are not what he was looking for, but I wanted to use $250,000 because it allowed me to illustrate some additional options from some companies who otherwise would not have participated.

Tentative Assessment: 300% at best and up from here subject to complete case review.

This translates into using their standard policy and multiplying the premiums X3. For a $250,000 10 year term, the annual premium would be $1680.00 or $147.00/month. At the end of the 10 years, the policy is designed to expire. Technically it doesn't expire but the premiums would go to something like $1400/month. There is a caveat that the policy can be converted to whole life at their standard pricing X 300% without proving insureability up to age 70 or the end of the 10 years.

Banner Life:
Standard/plus table 8 subject to review of all requirements.

Same policy, but Banner uses their standard plus pricing to adjust off of, also they have hidden their multiplication in table form. To figure, each table is 25%. Therefore 8 tables is 200% plus the original price which is 100% and you get the same 300% as Transamerica except you start at 1 better rate class. This boils down to $1252.50 per year or $109.59/ month.

Mutual of Omaha:
If medical credit's can be found table 6 probably best case assuming noother related health hx's and review of med records and labs are favorable.

This is the reason I wanted to do the $250,000 policy, Mutual of Omaha has a table credit strategy that will allow them to take positive credits from other areas and apply to the diabetes and give better underwriting. So 6 tables equals 150% added to the 100% base, and you've got 250% from standard pricing. This translates into $1400 per year or $122.50 per month. Not as good as Banner, but good that we got to see the option.

West Coast Life
Our tentative quote is possible Table F to Table H at very best – assuming no complications & good control for several years – subject to review of file.

This translates to $1212.90 per year or $106.13 per month. Looks like a company that has the best standard pricing in the industry to start their pricing from has a definite advantage where the math comes in.

American General:
If he is a Nontobacco classification, consider at Special Nontobacco Table F. If he is a Tobacco classification, consider at Special Tobacco Table H.

Well, our first split quote. We can see here that American General feels that tobacco use compounds diabetic complications. You may or may not agree, but this is how they treat the situation. Now American General doesn't use their standard price as base, instead they have a "special standard" that is less expensive by about two table classes. So we figure that Table F is equal to table 6. Just count it out on your fingers a1, b2, c3 etc. subtract 2 for their "special standard" and you are at 4 or 100% plus your 100% base and you get an annual price of $1053.00 or $92.14/month. Looks like we have our winner.

Thanks again to Phil for being our guinea pig. I would love to answer any questions you have about the illustrations, or how to interpret the underwriting classes. If you are thinking that the insurance companies purposefully make things extra confusing,..,..well your right. Hope this helps.

This info is interesting…and confusing. I’m a Type 1 diabetic, on insulin pump. I’m currently 31 yo, was dx at 13. I have no complications aside from trace-to-small amount of microalbuminuria which is being closely followed by my endo & a nephrologist as well. My A1cs have been in low 7s for past few years. I’m 5’10", 240#, non-smoker, no other medical conditions. I have been denied in the past by New York Life and my employer denied me additional coverage beyond the Basic Life Insurance they already provide. I’m married with one child. Where should I start looking for companies that specialize in “high risk” and use clinical underwriting? Any info you could provide me would be great! Thanks.

give me a couple of days and I’ll see what I can find you

John here is what I found through my contacts:

  1. $435.00 per year - $250,000 for 10 years
    Savings Bank Life Insurance Co of MA
    T-10/10 - 10 Year Term Guaranteed 10
    Table 8 or H
    Annual: $435.00 Semi: $221.85 Quarterly: $113.10 Monthly: $37.85

  2. $707.50 per year - $250,000 for 10 year term
    United of Omaha
    Life Answers
    Table 8 or H
    Annual: $0.00 Semi: $0.00 Quarterly: $0.00 Monthly: $0.00

  3. $743.16 per year - $250,000 for 10 year term
    Western Reserve Life
    Table 10 or J
    Annual: $0.00 Semi: $0.00 Quarterly: $0.00 Monthly: $0.00

  4. $1,302.50 per year - $250,000 for 10 year term
    Prudential Life Insurance
    Term Essential 10
    Table 8 or H
    Annual: $0.00 Semi: $0.00 Quarterly: $0.00 Monthly: $0.00