Which life insurance policy is best for you will largely depend on your own unique needs and circumstances, as well as the severity of your condition.
Typically there are 3 main policy options available:
- Term life insurance
- Whole of life insurance
- Over 50s plan
But how will these options be affected by type 1 diabetes?
Term life insurance
It’s possible to secure term life insurance as someone with type 1 diabetes.
However, depending on the severity of your diabetes, it’s likely that you’ll experience higher premiums due to your condition.
This is because medical information is needed at the point of application so that insurers can mitigate the risk you pose.
Term life insurance provides cover for a specified period of time (the term) and if you pass away during this time, a pay out is made to your loved ones.
Typically, you can take out term life insurance on level or decreasing terms.
Level term life insurance provides a fixed sum assured, meaning the amount paid out to your loved ones will never change.
On the other hand, a pay out from a decreasing term life insurance policy will reduce over time.
Whole of life insurance
Whole of life insurance provides lifetime cover, guaranteeing your loved ones a pay out.
You’ll be required to pay premiums for the rest of your life to keep cover in place.
Whole of life insurance most likely won’t be a feasible option as you’ll need to provide medical information at the point of application.
You’ll experience inflated premiums due to your condition which can be hard to manage over your lifetime.
Therefore it’s likely whole of life insurance won’t be the best option for someone with type 1 diabetes.
Over 50s life insurance
If you have type 1 diabetes, are aged 50 – 85 and a UK resident you may benefit from taking out an over 50s plan.
An over 50s plan guarantees acceptance to those in this age bracket, without the need for any medical information.
This makes it an ideal option for someone with type 1 diabetes as you won’t need to disclose your condition.
However, to compensate for the unknown risk, some insurers add a waiting period to the policy.
A waiting period is usually the first 12 – 24 months of the policy, where if you pass away due to natural causes no pay out is made. However, any premiums paid will be refunded.
There also tends to be a limit on the level of cover you can take out (typically up to £25,000).