Life insurance question

August 3, 2016 12:54 PM

What does a "change in health" mean from an insurance/legal standpoint?

I have recently had an employment change, such that I'm working only part time (and for a lower salary at that) at the job that gives me benefits. I used to have life insurance through work (8X salary was sufficient) but now any multiplier of my PT salary would leave my family inadequate resources if I die in the near future.

So I completed a medical exam given by a private insurance company, qualified for preferred plus, and bought a policy. A couple of weeks later my insurance agent called to give me a buy-up opportunity for a lot more coverage for a few dollars more per month. I agreed, and they sent me the revised policy along with two statements to sign. One stipulates that the policy has a higher value, and the other asks me to confirm that I have not had a "change in health" nor "consulted with a health care provider" since doing my original exam.
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By luck, I haven't had any medical appointments in the interim. I signed and mailed the packet back, it is postmarked yesterday. However, I suspect, based on the way I feel, that I may be pregnant. I wasn't pregnant when I took the medical exam for insurance. I have also scheduled a first prenatal appointment which happens in a week.

My question is: what is meant by a "change in health." Would pregnancy be included? Can it affect the issuance or cost of this policy? Secondly, I feel that I don't technically know whether I am pregnant until a doctor confirms, is that a reasonable interpretation?

posted by anonymous to Law & Government (4 answers total)

'Change in Health' means 'has anything changed that could reduce your lifespan compared to our original assessment' and would usually cover things like becoming a smoker, having a large increase (or maybe decrease) of weight, being diagnosed or treated for something (heart attack, cancer), etc.

Pregnancy isn't a medical condition that insurance underwriters would look at as a risk in relation to the price of the coverage (well, in my experience working in the industry in the UK anyway) - they're looking for things that would suggest possible impending medical bills or payouts earlier than they'd otherwise expect, and unless you or your family has a history of pregnancy-related illness or risk then I'd be shocked if it influenced them at all. Given that you haven't had a medical appointment about it, you haven't lied. Consider what would happen if you became pregnant a year after taking out the insurance - I wouldn't expect you to have to notify them.

It may be worth giving them a call if only to put your mind at rest (anonymously, from a payphone?!) but even if they were to deem pregnancy to be a risk within their underwriting guidelines, then any increase in premium should only apply during the pregnancy itself rather than afterwards and any such increase should be tiny as pregnancy isn't a dread disease!

(And if you do turn out to be pregnant, congratulations and good luck!)
posted by Chunder at 1:10 PM on August 3, 2016 [3 favorites]

Did the statement about "change in health" include any definition of that term? If it did not, then just from a reasonable-user-of-the-English-language perspective, I would not necessarily consider pregnancy to be a "change in health." And certainly not "gee I think I might be pregnant." To me, if somebody said, "tell me about your health?" I wouldn't take it as a question that called for a statement as to whether I was pregnant or not.

This is not legal advice but linguistic advice.

(BTW, in the place where you live, don't they have pee on a stick pregnancy tests?) (and if you are, congratulations!)
posted by sheldman at 1:11 PM on August 3, 2016

You are probably fine. I would be more concerned if this were health insurance. If you suspect pregnancy and try to get certain kinds of health insurance without revealing that fact, that can be deemed fraud. In the case of life insurance, in most cases, your suspected pregnancy should not matter to them.

How Does Pregnancy Affect Life Insurance Rates?:

In most cases, pregnancy has no effect on life insurance rates

Why It Pays to Get Life and Disability Insurance BEFORE You Get Pregnant (This is about late stage pregnancies.)

Worst case scenario: If you die as a complication of the pregnancy and they learn you had a prenatal appointment when you sent the packet, they may rescind the policy -- at least, the portion that you just applied for -- reimburse the premiums and not pay benefits. If you live through the pregnancy, they probably will not ever care that you found out you were pregnant right after submitting your paperwork.

I worked in insurance. I did not pay life insurance benefits and things vary from company to company. But I think you do not need to sweat this.
posted by Michele in California at 1:16 PM on August 3, 2016

I also work in insurance. At the time of signing the insurance contract, you were indeed acting in "utmost good faith" - at the time of signing you had not experienced a change in health, nor consulted with a healthcare provider since your original exam. Indeed to the best of your knowledge, you were being entirely truthful at time of entering into this new contract.

Also, a few years ago we'd signed up for life insurance just a few weeks after confirming we were pregnant, and admitted as such to Insurers. Our insurer had no qualms about my "delicate condition", but advised on some additional coverage to enable funds for BabyBunny's future education.
posted by lizbunny at 2:34 PM on August 3, 2016 [1 favorite]