Many life insurance companies will factor in an applicant’s family history when considering their risk classification and ultimately the cost of insuring that individual.
Family medical history is a good way for the insurance company to get a general idea of potential claims that they could face by insuring someone.
For example, if an applicant comes from a family who has a history of heart disease and/or cancer, they may face higher premiums even if the applicant is perfectly healthy.
While the specifics of how family medical history impacts insurance premiums does vary from company to company, most insurance companies only consider medical history from your family while they were 65 or younger. Insurance companies may charge you a higher premium if your family has a history of certain health conditions.
In fact, it is customary that the health status of family members over the age of 65 will not be taken into account as one’s health naturally decreases with age.
If insurance companies did not factor in an applicant’s family medical history, then there would only be one fiscally reasonable option to determining insurance premiums – having everyone pay the same for insurance. By doing this, healthy people would ultimately have to pay the burden to help offset the cost incurred by insuring those with chronic health conditions or have a multitude of risk factors.
During the underwriting process, applicants are asked to provide information about the age and health of living parents, brothers and sisters; if deceased, their ages at death and the causes of death are asked to be provided.
If an applicant has a family member(s) that died or is dying from a serious medical condition before the age of 60, then this will negatively affect the applicant. If the applicant only has one family member who suffered from a medical condition such as diabetes, it may not have a great effect on the premium. Insurance companies will examine the big picture to determine insurability, but keep in mind that this varies from company to company.
Industry professionals recommend shopping around for life insurance if one or more of your family members have been diagnosed with a serious health condition before the age of 65.