Why you shouldn't wait to apply for health insurance coverage.

Most people understand that they need to purchase insurance for their home before they have a fire, or insurance for their car before they have an accident.

Why?

Because we know intuitively that no reasonable person (or company) would be willing to offer us coverage while our house is on fire, or immediately after we’ve just had an accident. Insurance companies just wouldn't be in business for very long if they offered insurance protection in these circumstances.

The same concept is true for our health.

Unless you have been blessed with the gift of immortality, all of us human beings (unfortunately) face the prospect of aging, and in doing so will tend to develop some health history along the way. Likewise, unless you happen to have a crystal ball, developing health conditions is unforeseeable and unexpected. Throughout the course of your life, you may acquire an injury, or develop an illness - chances are good that it will be one or the other or both.

This accumulation of our health history can change what is referred to as your insurability.

Insurability

Insurability is essentially how likely you are to be able to get insurance for whatever it is you want insurance for.

When you purchase insurance what you're really doing is asking an insurance company to share a portion of a particular risk with you. The insurance company will charge you (called a premium), in order to share in this risk.

In order to determine whether or not they even want to engage in sharing the requested risk with you, the insurance company must first assess the risk. This assessment will help them determine whether or not they even want to offer you insurance (they might not), and if so how much they should charge you to be appropriately compensated for the risk at hand.

Put simply if you are a high risk, an insurance company will want to charge you more and/or be willing to offer you less coverage compared to a person who is a low risk.

Insurance works fundamentally the same way across the board - it doesn't matter which insurance company, or which insurance product, these principles will apply in one form or another.

Better to apply when you’re young and healthy

Naturally then, it makes sense that it is preferable to apply for health insurance coverage when you have little-to-no health history, versus applying after you’ve accumulated a lengthy health history.

Simply put, insurance company views a person with little health history as being less risky compared to a person with a lot of health history.

Because you will tend to have less health history when you're younger as compared to when you're older it, implies that it is better to apply for coverage when you are young(er) and healthy(ier).

Applying when we are young and healthy means that we will have the widest variety of options available to us we can pick and choose from the best plans and get the most comprehensive coverage thus ensuring that any health history we develop afterwards will be fully covered.

What if I already have some health history, am I hooped?

No, there are always options available for people even with lengthy health histories.

However, It's important that you understand, that it may restrict the options that are available to you, or your coverage may come with exclusions for pre-existing conditions.

Exclusions are essentially particular health conditions or events that the insurance company is not willing to offer you coverage for.

For more context, please refer to this blog post which explains more fully how exclusions for pre-existing conditions work on health insurance plans. Additionally, we encourage you to have a look at this blog post as well which offers an in-depth explanation of the different plan types available and when each type is most appropriate.

Newborns

Just a quick aside about newborn children.

For all the reasons we've discussed, if you've recently had a newborn child (or plan on having one) best practice is to notify the insurance company at the earliest possible opportunity so that your newborn can be added to your health insurance plan right away.

The assumption on behalf of the insurance company being that if the child has recently been born, they haven't yet had any time to accumulate health history and therefore it's a pretty safe bet to add them to the plan without any questions asked.

This is usually something you're able to do within 30 days of the child being born. Beyond 30 days however, the insurance company may want to have medical underwriting completed - which means answering medical questions and perhaps obtaining a report from the child's attending physician so that they can assess risk just as they would with any other person when applying for health insurance for the first time.

This could also mean that if your child has developed some health history in their first 30 days of life (which can happen - believe us), it’s possible that the child may have exclusions applied to their coverage.

Summary

To recap;

• As human beings age, they naturally develop health history - this can affect your 'insurability' for health insurance purposes.
• Insurability is how likely you are to be able to get insurance for whatever it is you want insurance for.
• Applying for healthcare coverage when you are young and healthy means you'll have less accumulated health history and thus more favorable insurability. Meaning, you'll have an easier time getting the healthcare coverage you want.
• Got a baby on the way? Let your insurance provider know as soon as they're born to help ensure no issues in adding them to your coverage.

Next steps

Aeva was designed to help make the process of selecting a health care plan as easy as possible, by asking you a few simple questions and presenting you with a curated list of choices from Canada's top insurance companies.

Prefer a human touch? You can also always chat/email/or speak with an Aeva advisor who will be happy to assist you with selecting a plan that's right for you and your family.

Give us a try at https://aeva.ca

Thanks for reading!