My friend, who is a teenager with diabetes, would like to purchase a permanent life insurance policy but is having a hard time finding a company that will insure her.

Assuming the person is actually under the age of 18, few companies insure the lives of children/teenagers. It makes them too attractive a target for foul play because they rarely have the type of background that would require life insurance. Regardless, there are two types of life insurance: Whole Life and Term Life.

Term Life is a basic insurance policy for a set value over a period of time for a set premium. A term life policy is usually written for a 1 year period and is usually renewable.

Whole Life is actually a retirement investment vehicle in addition to providing insurance against the life of the policy holder. Whole life policies last for the life of the policy holder or as long as they pay the premiums. The “cash value” of the policy is invested for the policy holder, and when the policy holder reaches old age (usually over 62), they receive the value of the policy either in a lump sum or as an annuity paid over a term of years.

Generally, people with a chronic disease find it more difficult to purchase life insurance. Few insurers will write a whole life policy for someone with a chronic disease because the actuarial calculations for paying on the policy is higher than they consider acceptable. On the other hand, people with diabetes may find it possible to obtain term life policies, particularly if they can purchase the policy as part of a group or through their employment. Generally, the smaller the amount of the policy, the fewer health questions are asked and the less likelihood of the requirement of a medical exam.

I often recommend that people with diabetes seek out several small term life policies from different carriers instead of applying for a large policy from one insurer. This method allows the insured the peace of mind of providing for their family while staying away from intrusive insurance company applications.

DSH