Senior Financial Services Manager at Phillip Securities (Jurong East)
Hi Hui Juan,
There are many of my clients who have managed to get coverage with a pre-existing condition. A pre-existing condition is not a death sentence for insurance coverage as it really depends on the likelihood that such a condition leads to an increased risk beyond that of a healthy person.
For example, you may have slightly elevated cholesterol levels. This generally does not cause any change in your risk factor for death, and plenty of insurers will issue a case at standard premiums for this.
I'll quote some examples for your understanding
Standard. Pretty straightforward. You're healthy, you apply, you get coverage, you pay the premiums quoted. That's pretty much every healthy person.
Loading. Your premiums are increased by a factor. However, this may not apply to the whole plan. As an example, if you have a whole life plan with a CI rider and you're assessed to have a higher risk for CI. The CI rider may be loaded, but the base plan will not be. As an example, someone with sleep apnea (a pre-existing coverage) will almost certainly be loaded for death and TPD.
Exclusion. You may not be covered for certain things. For example, I have a client who has loss of hearing in one ear due to a firecracker explosion when she was young (yes, it happens). She's excluded on hearing related coverage, obviously, but everything else is covered. And I do mean everything. In another example, VSD (ventricular septial defect aka hole in heart) is almost always a complete decline for CI coverage. You'll just pay for whatever the insurer is willing to cover you for, at standard rate.
Exclusion and loading. Basically a combination of the last 2 examples. For example, sleep apnea will lead to exclusion of CI coverage and loading on death TPD, all on the same plan.
Decline or postponement. The insurer has decided that they are unable cover you (decline) or that they may want to wait for your situation to stablize before offering you coverage (for example if you are undergoing treatment). I had a client who had a planned operation (minor one) that was scheduled and thus our application was postponed, however after complete recovery from the surgery (supported with a memo from the doctor), she was granted standard coverage. You need to understand that insurers will be 'kia-see' in general, so they would rather opt to wait for my client to undergo the operation and recover fully, just in case.
As to how much my clients are paying, it really depends on the coverage they are seeking. If you're loaded 400% on death/TPD, a $1000/yr premium becomes $5000/yr. If you're loaded on just a rider, only that rider premium increases as I have highlighted. So it really does depend on how much your coverage costs first, and then we'll have to see if loading is applied.
Hope that answers your question.
And as a last note for anyone reading this. Please get your coverage done up (if you're looking to get coverage) BEFORE you do a health check up. We all like to think we're healthy, however if a health check up uncovers anything at all, you can't rewind the clock and apply for insurance as a healthy person any more.