I have enough life insurance right now. But I might need more in the future if I decide to start a family. Will I be able to buy more later, even if I develop a medical condition?
It depends on what the medical condition is. Your opportunity to obtain additional life insurance later in life will depend primarily on your health. A company will also consider your age, occupation, whether or not you smoke, any dangerous hobbies, and the amount of insurance you want.
If you're healthy, the company will most likely accept your application. However, regardless of your health, the older you are when you apply, the more expensive the coverage will be.
If you have a health problem, the insurance company might do any of the following:
- Issue the policy with standard rates, which indicates that your medical condition does not make you an above-average risk
- Issue the policy for the amount you wanted, but charge a higher premium
- Decline to offer you coverage
Life insurance companies will also consider your occupation and hobbies. In the rare case where an applicant has a hazardous occupation or hobby, such as race-car driving, the company would probably issue the policy but give the customer the choice of either excluding the hazardous activities or paying a higher premium.
The insurance company also looks at the amount of insurance you're applying for. If it seems excessive to the underwriters, you'll have to explain to them why you need that amount.
Special policies are also available for people with serious but not terminal illnesses. The policies have a graded death benefit: If you die of an illness in the first three to five years, your beneficiaries are paid a percent of the benefit. If you die from an accident, typically the full death benefit is paid. These policies are expensive but have a cash value benefit. The coverage provided can offer some peace of mind.
Of course, there's always the chance you won't be able to get more life insurance if you develop a serious illness. If you think you'll someday have a family, it's a good idea to buy life insurance now while you're healthy and young. For the best individual advice, consult your life insurance agent or financial planner.