How do life insurance policies typically manage pre-existing conditions?

Life insurance policies typically manage pre-existing conditions by imposing exclusions or higher premiums. This approach allows insurers to mitigate risk associated with covering individuals who have known health issues prior to obtaining insurance. When underwriting an application, insurers evaluate the applicant's medical history to determine the potential for increased claims.

If an applicant has a pre-existing condition that could impact their life expectancy, the insurer may choose to exclude coverage for that specific condition, meaning any claims related to it would not be paid out. Alternatively, the insurer may calculate that the risk associated with insuring an individual with a pre-existing condition warrants a higher premium, which compensates for the additional risk they are taking on.

This practice is standard in the insurance industry as it balances the need to provide coverage with the necessity of maintaining financial stability for the insurer. Insurers do not completely ignore pre-existing conditions, nor do they automatically deny applications solely based on them. They also do not generally impose blanket waiting periods for coverage, although some specific policies may have waiting periods for certain conditions based on their underwriting guidelines.