The Clock is Ticking: Why Your Diagnosis Date Matters for Type 1 Diabetes and Insurance

Here's why applying for personal insurance cover early, is one of the most important financial decisions you can make.

But the question is … just how early is early enough and why?

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Well to answer that we first need to look at how life insurance companies in Australia think about living with a life long (chronic) health condition - and diabetes is considered a lifelong (chronic) condition.

If you or someone you love are living with and managing Type 1 Diabetes (T1D), you already know that timing is everything. Timing your insulin, timing your meals, and timing your blood glucose checks are part of your daily rhythm. And if you're living with Type 2. while you might have more freedom, the same routine is never far from your thoughts.

But there's another critical timeline that many people living with diabetes, T1D or T2D, miss until it’s too late:

• The time between your diagnosis date and the day you apply for life, disability and trauma insurance.

To understand why this is so important we now need to learn about the gatekeepers to the personal insurance industry - the Re-insurers.

What is a Global Re-insurer and why should I care?

In Australia, life insurance companies don't just guess your health risk; they use vast amounts of data from global reinsurance companies, called ‘re-insurers’: giants like Swiss Re, Pacific RE and SCOR to name a few.

These global 'insurance companies of the insurance companies,' map out millions of personal health records to calculate life expectancy and illness probabilities that we all live with, and when they update their data modules, this changes the acceptance conditions and pricing that the local insurance companies use.

• Think of it like an interest rate change: but for the local life insurance market.

And we’re talking about big dollars and big data. The top 5 global reinsurers hold hundreds of billions in assets, generating tens of billions in annual revenues.

Tracking the re-insurers and their data changes is important to a specialist risk financial advisory service like Sapience, as it helps us understand what our future clients are facing and where our clients will get the best opportunities for personal insurance cover (and where others will be refused).

That's where a specialist risk adviser really is your secret weapon.

Diabetes in the spotlight

When it comes to underwriting Type 1 Diabetes, reinsurers look at a few key things:

• your HbA1c (glycemic control)
• your height to weight ratio
• your blood pressure, and crucially
• the duration of your disease

Duration of Disease is the Ultimate Assessment Metric

Both SCOR and Swiss Re re-insurers explicitly state that next to HbA1c (glycemic control), the 'duration of the disease' (years since diagnosis) is the most heavily weighted risk factor. This means the longer a person has T1D, the higher their statistical probability of microvascular and macrovascular complications (kidney disease, retinopathy, cardiovascular issues).

SCOR notes that while mortality (Life Insurance) for diabetics is improving due to technology (like continuous glucose monitors and insulin pumps), morbidity risk remains incredibly high. Because of this, T1D applicants are routinely declined for Disability, TPD, and Trauma (Critical Illness) cover if they apply too late in their disease progression.

Secondary complications: The problem of when that everyone living with Diabetes continues to face

Statistically speaking, the longer you live with T1D or T2D, the higher the risk of you developing secondary complications like cardiovascular disease, kidney issues (nephropathy), or eye problems (retinopathy).

Pro Tip: To a life insurance underwriter, a 30-year-old who was diagnosed two years ago, has a vastly different risk profile than a 30-year-old who was diagnosed twenty years ago.

Why Applying for Personal Insurance Early is Vital

Many people wait until they have a major life event like buying a house, get married, or have kids to think about Life Insurance, Total & Permanent Disability (TPD), and Trauma Insurance.

If you have T1D, waiting is a luxury you cannot afford.If you're living with T2D, you're still facing the same secondary complications clock

1. Before the Complications Arise: If you apply for insurance once your T1D is well-managed and stabilised, but before any secondary complications appear, you have a solid chance of securing Life Cover and Income Protection (usually with an extra premium, known as a loading).

Seven in ten people living with diabetes (72%) only found out they had diabetes after developing complications associated with the condition. Additionally, almost all (94%) of those surveyed had experienced one or more diabetes complications during the course of their life with diabetes.  - The International Diabetes Federation

2. The Trauma and TPD Trap: Trauma (Critical Illness) and TPD insurance are notoriously difficult for Type 1 Diabetics to secure. If your "duration of disease" is too long, or if there is even a hint of protein in your urine or changes in your eyesight, insurers will almost universally decline your application for these specific covers.
3. Locking in the Contract: Retail life insurance policies in Australia are guaranteed renewable. Go back and reread that again.  This means if you get your cover in place early, when you are relatively healthy, the insurer can never cancel your policy or single you out for a premium increase if your health deteriorates or complications arise later in life.

The Ultimate Head Start

The absolute best time to get personal insurance sorted is, of course, before any medical condition arises. (And if only we could all predict the timing of that future). This is why we passionately advocate for young professionals and families to lock in their personal insurances while they are young and healthy. 

• T1D is an autoimmune condition; it is not caused by lifestyle, and it can strike out of nowhere.
• Having cover in place before a diagnosis guarantees your financial safety net is secured without medical loadings or exclusions.

However, if you have already been diagnosed with T1D or Latent Autoimmune Diabetes in Adults (LADA), the second best time to speak with a specialist risk adviser is now and apply right now.

Navigating the Medical Underwriting Maze

Applying for insurance with T1D is not something you should do directly through a comparison website or a quick online form. If you get declined by an automated system, that 'decline' goes on your permanent insurance record and must be disclosed to all future insurers.

We believe a specialised health condition requires a specialist risk financial adviser who understands complex medical underwriting. We know how to pre-assess your medical history with the right insurers anonymously, using your HbA1c history and diagnosis date to find the company with the most favorable appetite for your specific situation.

Don’t let the clock run out on your insurability. If you or a family member are navigating life with T1D, reach out to us today for a confidential conversation about securing your cover.

Frequently Asked Questions: Diabetes and Personal Insurance

Drew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn.  Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.