Life Insurance for Sleep Apnea

Loud snoring can keep your partner up all night, but can it also affect your insurability? 

Loud snoring combined with pauses in breathing and loud gasps as you inhale can be a sign of sleep apnea. Though treatable, sleep apnea is a sleep disorder that can lead to hypertension, lung damage, and heart issue. Because of the risk, it can affect your life insurance rates. 

Let's cover this in more detail.

Key Takeaways: 

• You may qualify for life insurance with sleep apnea, but may have to pay more
• The type of sleep apnea you have, its severity, and other factors (like your BMI) will determine your insurance cost
• Severe sleep apnea along with other underlying health issues may lead to a policy denial

What is Sleep Apnea?

Sleep apnea is a sleeping disorder in which breathing repeatedly stops and restarts. Cessation of breathing during sleep lasts not more than 30 seconds and generally occurs due to blockage of the airway. However, in some instances breathing stops because the brain is unable to control the breathing. Regardless of the cause, lack of oxygen forces the brain to go into the survival mode, meaning it wakes you up just enough to resume breathing. But this prevents you from enjoying healthy, restful sleep. 

Snoring is the most common symptom of sleep apnea. Others include: 

• Gasping for air during sleep
• Daytime sleepiness
• Shallow breathing
• Morning headache
• Awakening with a dry mouth

Sleep apnea is of three types, and each one of them can have either mild or serious symptoms. 

1. Obstructive sleep apnea (OSA): It occurs when your upper airway gets partly or fully blocked repeatedly while you are sleeping. 
2. Central sleep apnea (CSA): A rare type of sleep apnea, CSA occurs when your brain fails to properly control your breathing while you sleep. 
3. Mixed sleep apnea: Mixed sleep apnea is a combination of OSA and CSA. 

Can I apply for Life Insurance with Sleep Apnea?

Yes, you can qualify for standard life insurance, provided you are keeping up with the treatments recommended by your doctor. Even though sleep apnea is considered a pre-existing condition, preferred rates are not out of your reach if the condition is well controlled and your overall health good. 

People with mild to moderate sleep apnea who are actively seeking treatment and have blood sugar, cholesterol, and weight within healthy ranges can expect to pass through the underwriting process without any issue. Such applicants will likely receive preferred or standard rates. 

A severe sleep apnea or not following your doctor’s recommendations, in turn, could lead to a sub-standard rating. That means you could end up paying anywhere between 25% and 150% more than the standard rate. In rare instances, the insurer may even deny life insurance coverage, but you still have options.

If you are unable to get a medically underwritten policy due to sleep apnea, consider guaranteed issue life insurance. These policies don’t have any medical requirements, so you can secure coverage despite underlying health issues. 

Sleep Apnea and its Impact on Life Insurance

How your sleep apnea will impact your insurability depends the type of sleep apnea you have, its severity, date of diagnosis, and compliance with treatment. In addition to sleep apnea specific factors, insurance companies will look at a host of other risk factors when evaluating your application.

That’s because sleep apnea increases the risk of several health conditions, some of which can shorten your life expectancy. Studies have found a link between sleep apnea and such conditions as: 

• Type 2 diabetes
• High blood pressure
• Heart disease
• Heart failure
• Depression
• Cerebrovascular disease

Given the fact that sleep apnea is regarded as a pre-existing condition, there are three possible outcomes of applying with it. 

1. You receive the preferred rates: A sleep apnea diagnosis does not automatically mean a premium hike. You can qualify for preferred rates if you have mild form of sleep apnea, are managing it well, and have a healthy BMI and blood pressure, blood sugar, and cholesterol levels. 
2. You receive a sub-standard rate: If you have a severe form of sleep apnea or are not following a treatment regimen, you could receive a table rating. The more severe your condition, the lower the table rating and the higher the premium is. Typically, people with severe sleep apnea pay 25% to 150% more than the standard rate. 
3. Your application is denied: The insurer may ask for a physician’s statement to get a clearer picture of your medical history, how well you are managing MS, and its prognosis. 
4. Turn down the application – If your sleep apnea is very severe or you have other underlying health issues, the insurer may refuse to write you a standard policy. Before making the final decision, the insurance provider is likely to request an Attending Physician Statement (APS). An APS is your doctor’s detailed report of your current health and helps the insurer learn about the severity of your condition and effectiveness of the current treatment. 

Life Insurance Options with Sleep Apnea

Unless you have a severe form of sleep apnea and it is not well controlled, you will have the same options for life insurance as someone without sleep apnea. 

Like others, people with sleep apnea can opt for a term life, permanent life, or a final expense life insurance policy. 

Term Life Insurance

Term life insurance as basic and inexpensive as life insurance gets. You will get life insurance coverage for a set period, which could be a certain number of years, like 10, 20, or 30 years, or until you reach a specific age, like age 65. The insurance provider pays out only if the insured passes while the policy is active. If the policy term expires, the coverage ends, unless it is renewed.  Term life plans don’t accumulate cash value. 

Most people need life insurance protection for a certain number of years, for example, while caring for children or until they pay off their debts. As such, term life is a better option for most people.  

You may want to consider term life insurance if: 

• You have minor children (Once the kids grow up, they will likely not depend on you financially)
• Yours is a dual-income household (If anything happens to you or your spouse, the surviving partner may find it difficult to maintain the present standard of living)
• You are single but have a private student loan with a loved one as a co-signer (In the unfortunate event of your demise, the insurance proceeds can help the co-signer pay off the loan balance without any financial strain) 
• You are approaching retirement but do not yet have a sufficiently large retirement fund (Life insurance can provide security while you save up)  

Permanent Life Insurance 

Permanent life insurance includes a savings component in addition to the death benefit. This means the insurer charges considerably more than the net cost of coverage and invests the extra premium. The cash value grows at a fixed or varied rate, depending on whether you have whole life or universal life insurance. As a policy owner, you can dip into the cash value at any time once it crosses a certain threshold amount.

The policy beneficiary typically receives only the death benefit when the insured passes. Since there’s no expiry date, a permanent life policy eventually pays out. On average, permanent life insurance is anywhere between 10 to 15 times costlier than comparable term life plans. 

All the same, there are some situations in which choosing permanent life over term life insurance makes senses. You may better off buying a permanent life plan if: 

• You are a high-net-worth individual ($10M+ in assets)
• You have maxed out your RRSP and TFSA options (Permanent  life plans offer tax-deferred benefits)
• You have a dependent who will likely need lifelong care (A permanent life policy gives peace of mind in knowing that your beneficiary will receive the death benefit, regardless of when you pass)
• You have a large, complex estate (Life insurance can help you preserve the value of your estate or distribute it equitably among your heirs)

Final Expense Insurance

A severe sleep apnea combined with poor overall health may disqualify you from buying standard life insurance. If that’s the case, a final expense insurance plan is your option to secure some coverage. 

Also referred as burial or funeral insurance, final expense insurance is a small permanent life insurance policy. It is designed for people who are having difficulty getting approved for a medically underwritten plan and as such take a more lenient view of your health. However, these policies have higher premiums and smaller death benefits than traditional plans.  

Final expense insurance is of two types: 

• Simplified issue life insurance: Lets you bypass the life insurance medical exam, but not the health questionnaire. The insurer determines your insurability and premium rate on the basis of the information provided on the application form. Simplified issue plans cost more than traditional plans but are cheaper than guaranteed issue policies. 
• Guaranteed issue life insurance: There’s no medical underwriting at all. If you are between the ages of 40 and 70 or 75, the approval is almost guaranteed. The assured sum, however, is typically not more than $50,000. Most guaranteed issue policies (if not all) include a waiting period, usually two years. If you die a natural death within the two years of the policy issue date, your beneficiary will only receive the premium dollars paid so far plus interest. 

Group Life Insurance

Like final expense insurance, group life insurance involves minimal medical underwriting and therefore is an option for people with severe sleep apnea. However, you can buy a group life policy only through an employer. 

How does Sleep Apnea Affect Life Insurance Cost?

How much you will pay for life insurance depends on the type of sleep apnea you have, its severity, compliance to the prescribed treatment(s), and overall health. 

For example, if you have been diagnosed with obstructive sleep apnea and are following a proven treatment plan, you may qualify for standard rates. Even a preferred rate is impossible in this scenario, especially if you have a healthy weight and no underlying health concerns. On the other hand, a severe sleep apnea can bump up your premium rate considerably. In rare instances, you may not even qualify for a standard term or permanent life plan. 

Here are the possible underwriting outcomes for different sleep apnea types. 

Obstructive Sleep Apnea (OSA)

• Standard rates if condition is mild and well managed
• People with severe cases receive table ratings and pay up to 150% more than the standard rates
• You may not qualify for standard policies if you have a severe OSA and don’t comply with treatment

Mixed Sleep Apnea

• Standard rates if condition is mild and well managed
• People with severe cases pay up to 150% more than the standard rates
• Possible decline for people who have a severe mixed sleep apnea and don’t follow their treatment regimens

Central Sleep Apnea

• Typically, people with central sleep apnea are not issued medically underwritten policies

Is sleep apnea considered a pre-existing condition?

Yes, it is. If you have been experiencing sleep apnea before you apply for life insurance, the insurer will consider it a pre-existing condition. As such, it can affect your insurability and premium rate. 

A pre-existing condition is any illness or disease that exists before the date an insurance policy takes effect. When applying for coverage, you should disclose all pre-existing conditions, including those you consider minor. Life insurance companies calculate your premium rate based on your medical history and current health, among other things. 

Can you be denied life insurance if you have sleep apnea?

Even though sleep apnea is a pre-existing condition, it usually does not lead to a policy denial. That said, if you have a severe sleep apnea, are not following your doctor’s treatments regimen, or have multiple other health issues (like high blood pressure, higher BMI, or high blood sugar levels), insurance companies can turn you down. In that case, guaranteed issue is your only option to secure coverage. While guaranteed issue life insurance has smaller death benefits, some coverage is better than no coverage.  

Conclusion

In most cases, sleep apnea does not prevent you from qualifying for medically underwritten life insurance. The severity of your condition and your overall health will determine how much premium you will pay. 

Each life insurance company underwrites policies differently. The best way to find an insurer that will offer you the lowest rate for your personal situation is to work with an experienced broker like Dundas Life. Our licensed experts will walk you through all your options and help you secure the policy that’s right for your family. Book your call today.

FAQs

What happens if I get diagnosed with sleep apnea after I have life insurance?

If you develop sleep apnea after taking a life insurance policy, the insurer should honor it as normal, provided you revealed your health situation when applying for coverage. 

Is sleep apnea a critical illness?

Typically, life insurance companies do not regard sleep apnea as a critical illness. If you are purchasing a stand-alone critical illness policy or adding the critical illness rider to an existing life insurance policy, the insurer will not pay you a tax-free, lump-sum amount in the event for a sleep apnea diagnosis. 

Sleep apnea, while a serious condition, is not considered life-threatening by insurance carriers because it can be successfully managed with treatment. However, sleep apnea does increase the risk of several conditions, which critical illness insurance plans frequently cover. Examples include cerebrovascular disease, heart disease, and heart failure.

Is sleep apnea a disability?

Most life insurers are not likely to regard sleep apnea as a disability. An injury or illness is considered a disability if it temporarily or permanently prevents you from working. Even though sleep apnea can have a considerable impact on a person’s quality of life, it is not likely to stop someone from earning a paycheck.

Having said that, if your sleep apnea is so severe that it prevents you from performing the main duties of your job, you may qualify for disability benefits.  The definition of disability is different in each policy, so do check with your insurer before filing a claim. 

Do I need to take a medical exam for life insurance if I have sleep apnea?

Not if you don’t want to. You can opt for a no medical exam life insurance plan. But keep in mind that premiums for these policies are higher than those for medically underwritten plans. 

Do I need to disclose my sleep apnea diagnosis when applying for life insurance?

Yes, it is important to disclose full medical history to the insurer at the time of applying. Concealing relevant facts or lying on the life insurance application can defeat the entire purpose of buying coverage in the first place. If the insurer finds out that you did not disclose a pre-existing illness, such as sleep apnea, it may even cancel the policy, or reject a claim filed by your beneficiary. 

Are there specialized life insurance policies for individuals with sleep apnea?

Every life insurance company treats a sleep apnea diagnosis differently. So it’s possible some providers may rate it more favorably than others. If you have sleep apnea, consider working with an experienced insurance broker or agent. He or she can submit your application to the best life insurance companies for sleep apnea, improving your chances of securing a competitive rate. 

How can I improve my chances of obtaining affordable life insurance with sleep apnea?

You have a better chance of securing an affordable premium rate if you can convince the insurer you are doing everything in your power to effectively manage your condition. This includes following a healthy diet, exercising regularly, and sticking to your doctor’s treatment regimen. 

Do CPAP machines affect life insurance?

The proper use of CPAP reduces the risk of developing stroke and heart disease, besides allowing you to enjoy a good night’s sleep on a regular basis. Using CPAP therapy demonstrates that you are actively managing your condition and consequently can help you secure affordable rates.