According to the U.S. Census Bureau, 61 million American adults have some type of disability. For those with disabilities, qualifying for life insurance can be challenging because insurers often view those applicants as a greater risk. However, there are still coverage options available.
If you have a disability, keep reading to see how you can qualify for life insurance and discover some alternative options if you cannot qualify.
Life Insurance and Disabilities
One of the most important factors insurance companies look at when deciding whether or not you qualify for life insurance is your life expectancy. Life expectancy is defined as the average number of years a person is expected to live based on factors such as your current age and health.
If your disability does not affect your life expectancy (such as a back injury), you can still qualify for life insurance. The nature and severity of your disability will determine your available policy choices. Another example would be a physical impairment like blindness or deafness. In either case, you should be able to qualify for a traditional term policy.
However, if your disability does affect your life expectancy, it can impact your options. You may face higher premiums, limited coverage options, or denial of coverage. Severe disabilities such as cardiac issues may result in the denial of your application.
Insurance underwriting processes vary, so it’s difficult to pinpoint which disabilities will automatically lead to a denial. However, conditions like anxiety, depression, PTSD, cerebral palsy, and advanced stages of multiple sclerosis could affect your rates or even your ability to get coverage.
How Do I Increase My Chances of Qualifying for Life Insurance if I Have a Disability?
Even if you have a disability, there are things you can do to increase your chances of qualifying for a life insurance policy or receiving a more affordable rate. Those include:
Working with an Experienced Professional. An experienced life insurance agent can determine which companies are more likely to offer you coverage for your specific condition. They can anonymously shop your application around to find insurers willing to offer coverage.
Apply for an appropriate amount of life insurance. This is crucial. Applying for too much coverage is a reason to get denied. Instead, apply for an amount that is reasonable based on what your income was prior to your disability.
Work on your health. Despite having a disability, insurance companies will want to see that you are actively working to improve your health. This includes following your medical treatments, exercising, eating well, regulating your blood pressure, and not smoking.
Life Insurance for the Disabled
Term Life Insurance: A term life insurance policy covers you for a specific length of time–such as 20 years. You can choose your coverage amount and your rates will not change during the term of the policy.
Sometimes you can renew these policies when they expire, but the coverage amount and monthly rate will most likely change as you get older. Term life insurance may be a good choice if you have young dependents who count on your income.
Permanent Life Insurance: Permanent life insurance is more expensive than term life insurance. This is because it typically guarantees lifelong protection and a death payout to your beneficiaries, no matter when you die. Permanent life insurance policies usually build cash value which can accumulate on a tax-deferred basis and some policies even allow you to take out a loan against the cash value or withdraw funds.
Types of permanent life insurance include Whole Life Insurance, Universal Life Insurance, and Variable Life Insurance.
Options if you are Denied
If you cannot qualify for traditional life insurance, don’t despair. You still have some options. These include:
Guaranteed Issue Life Insurance: With guaranteed acceptance or guaranteed issue life insurance you cannot be denied. In addition, there are no medical questions or exams. The downside is that coverage limits are minimal–usually in the $5,000 to $25,000 range. Typically these policies have graded death benefits–meaning that your beneficiaries won’t receive the full death benefit if you pass away within 2 or 3 years of buying the policy. This is to protect life insurance companies from applicants who are severely ill and know they don’t have long to live.
Group or Supplemental Life Insurance: These are life insurance policies that are offered through your employer. Typically, you don’t have to go through any underwriting process and premiums are low. Base coverage is usually equal to one year of your salary.
Some group policies offer add-ons such as a waiver of premium, which allows coverage to continue but eliminates payments if you become totally disabled. To qualify, you generally must be disabled for at least 180 days and under 60 years old.
Funeral and Burial Insurance: These plans are designed so that your beneficiaries can pay for final expenses such as funeral costs. These policies usually don’t require a medical exam and have minimal or no medical questions.
While qualifying for life insurance with a disability can be challenging, there are options available. Working with an experienced professional, applying for an appropriate amount of coverage, focusing on your health, and exploring alternative options can help you find suitable coverage for your needs.
Tucker Disability Can Help
If you’ve been denied long-term disability benefits, we can help. We have over 30+ years fighting the insurance companies and have a 98% win rate.
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