Travel insurance for £1,000? Life insurance at 500% of the usual cost? Diabetics, breast cancer sufferers and heart attack victims are frequently charged outlandish prices for cover. But there are ways that anyone with a pre-existing medical condition can obtain insurance without paying an absurd premium.

Guardian Money sought out providers and brokers that will offer reasonable prices, and even found travel policies that would cover someone in their 90s with a terminal illness who wants to head to Spain on holiday.

Don't be tempted to lie about your medical status and rely on the insurer not finding out you had a pre-existing condition. If, for example, you are asthmatic and head off abroad with a standard insurance policy and suffer an attack that requires medical treatment, your insurer will be under no obligation to pay out.

So what should you do? We looked at three areas of insurance – travel, life and medical – to find the best way to obtain cover at the best price.

Travel insurance

Try the standard comparison sites first, as they can quote for people with pre-existing conditions. But don't expect too much; when Money tested them, we found the process laborious and clunky.

Try specialist search sites. We liked allcleartravel.co.uk, an easier-to-use service than the bigger names, although the prices we were charged were on the steep side. We asked for travel insurance cover for a 50-year-old male who had been diagnosed with bladder cancer in the past year. The cost for one week in Spain in August began at £120, while an annual policy would cost £274. To put those figures in context, cover for a week in Spain with the most basic travel policy starts at just £6.56 if you're a 50-year-old with a clean medical record.

Go to charitable organisations that operate in your field of health. For example, Diabetes UK (0800 731 7431) has put together its own travel policy specially tailored for the needs of diabetics. We found an annual policy for a 30-year-old with diabetes, Europe only, for between £62 and £75. For a worldwide policy, the price was between £86 and £107; once the trip includes the US, the rate went up to £123.

If you have suffered from breast cancer, both Breast Cancer Care and Macmillan have useful factsheets on travel insurance. Breast Cancer Care includes a list of insurers recommended by users of its discussion forums, though it does not endorse them itself. It notes that many insurers will turn down applicants if they have only recently come out of hospital or have secondary cancer. It also recommends that if you have an annual policy from your bank account, you should tell them about your breast cancer diagnosis. If you are asked to exclude cover for your breast cancer from the policy, do not agree without clarifying with the insurer what exactly you are excluding, as you may end up with a policy unsuitable for your needs.

Contact specialist brokers who may be willing to offer you cover even when the main market has turned you down or cover you at a cheaper premium than standard insurers have offered.

Try the British Insurance Brokers' Association's "find a broker" helpline service on 0870 9501790 or contact freedominsure.co.uk, Freespirit, and MIA Online.

Considering that mainstream insurers will turn down a woman with secondary breast cancer, we were heartened to find that MIA Online found us a policy for a fortnight in Spain for just £62.50 for someone who had had breast cancer three years earlier and was seeing the beginnings of secondary bone cancer.

"Standard insurers will not cover people who, for example, have had an operation within the last 12 weeks, are on chemotherapy or have secondary cancer, but we can cover most conditions and at a reasonable cost with set premiums, regardless of the number of conditions and no age limit," says Eileen Dalrymple-White, a director at MIA Online. "What matters to us is how the applicant is coping with their condition and, importantly, where they are travelling to.

"Unlike others, we would not automatically say 'no' so long as her GP says she is fit to travel and we believe there is a reasonable risk that she will cope well without being ill. Then we would charge her our standard £62.50 premium for two weeks in Europe."

But note that this policy was for a trip to mainland Spain or France. MIA looks at health facilities on a country by country basis and charges more, or turns down the offer of a policy, in other parts of the world. For example, it is likely to refuse cover for a trip to one of the Greek islands, where it says medical facilities may be primitive (although Crete makes the grade).

As you move further from Europe, or get older, the price of cover escalates. Cover for a trip to Australia starts at £137 for under 65-year-olds with a pre-existing condition, rising to £340 for someone over 81. A Caribbean cruise can be hugely costly; £554 for a 17-day trip for an over 81-year old. But, surprisingly, a terminal diagnosis does not mean cover is out of the question.

"We are all terminal from the day we are born," says Dalrymple-White. "We have had cases where someone has had chemo, then two years on it's gone to the bone and is resistant to intervention. But as we tell our underwriters, 'it's got a lot of bone to get round'. We're still able to offer our basic policy at £62.50 for Europe. Even for someone with a terminal illness who is in their 90s, we can offer a policy covering two weeks in Spain for £177. But we'd have to say 'no' to the US."

Get an Ehic, or Ehic Plus policy. The Ehic (European Health Insurance Card) costs nothing and gives you free or reduced cost emergency treatment in EU countries. Apply at the Department of Health website or call 0845 606 2030. But it doesn't cover the usual things such as lost bags or cancellation, or, crucially, repatriation to the UK.

Ehic Plus (08450 555 222) is an insurer that adds baggage, cancellation and repatriation to top-up the cover provided by the Ehic, and says it will add cover for pre-existing conditions for a small extra premium.

We tested its service and found some astonishingly low prices. For example, a 50-year-old female who has had breast cancer, but where the treatment was one to four years ago and it has not recurred since, can get an annual travel policy covering EU countries for just £23.98. But when we asked it to cover a 50-year-old male with bladder cancer, it declined to offer a policy.

Life insurance

Mainstream life insurers vary in their attitude to individuals with pre-existing medical conditions. While some will consider such customers and give their applications detailed consideration, others are less interested in this higher-risk business.

So it is worth going to an independent broker specialising in health-related and life insurance products such as LifeSearch.co.uk, ActiveQuote.com, or PMI Partners who will let you compare quotes online across the whole market and back up your search with free telephone advice from a broker who should know which insurers are best suited to your circumstances.

The insurer will take into consideration your health records, ask you how long you've had a long-term condition, what medication you take and other questions. They may ask to see your medical records or ask your GP to answer questions about your health, and, in extreme cases, request that you undergo a medical before a quote is given. The insurer may decline your application or offer you a policy with no exclusions, but with the premium raised or "loaded" to reflect the increase risk associated with your health record.

We asked LifeSearch.co.uk to prepare some quotes for life insurance around various scenarios. Someone aged 35 buying life insurance for the next 25 years that would pay out £150,000 on death, would pay around £11.65 a month, assuming their medical record is clean. From there on, the premiums rise according to the seriousness of the condition. If you're obese, the premium rises to £17 a month.

If you had multiple sclerosis, with the last symptoms three to five years ago, it hits £23 a month. Breast cancer takes it to £53 a month (see box).

"If an insurer believes there is an insurable risk, they will price it accordingly," says Martin Bamford of independent financial advisers Informed Choice. "So most people with pre-existing conditions can get life cover if they are prepared to pay the price."

Applicants declined by insurers on the main market may be able to get cover through a specialist intermediary such as Pulse Insurance which arranges cover for difficult-to-place and non-standard risks.

"Someone who has previously suffered a stroke and had a heart attack and has diabetes, for example, can normally get life cover through us. But the underwriters will not provide cover for certain pre-existing conditions including, for example, autism and Alzheimer's disease, so there are still cases we do have to decline."

Private medical insurance

Many individuals with pre-existing medical conditions can get private medical insurance, but most policies will come with exclusions and none will cover you for permanent, chronic conditions such as diabetes, arthritis and certain types of heart conditions.

The most popular type of policy suitable for those with pre-existing conditions uses what is known as "moratorium" underwriting.

"This usually means that the policy won't cover you for any medical condition you had in the last five years but, if it does not reoccur within the next two years after taking out the policy, you will regain cover for that condition," says Richard Theo of ActiveQuote.com. "So someone like me, who had a knee operation seven years ago with no further symptoms or problems, for example, would be able to get cover for that condition."

A second form of policy involves full medical underwriting, where the applicant is asked detailed questions at the outset about any relevant medical conditions; anything the insurer is concerned about – which usually includes most pre-existing conditions – will be specifically excluded from cover.