Life insurance, it’s not your typical Amazon Prime purchase.
Buying coverage is stressful and confusing for most people. Buying coverage that’s effective and doesn’t cost a fortune can seem like finding the golden goose, especially if you’re disabled.
The Council for Disability awareness classifies 37 million Americans as disabled, so we get a lot of questions about buying life insurance when you have a disability.
Here’s the first question many people ask: Can you get life insurance if you are disabled?
And the answer is yes. In 1990, Congress passed the Americans with Disabilities Act, preventing companies from denying coverage to anyone because of a disability.
Types of coverage may vary, and certain policies may cost more, but regardless, you absolutely can get covered.
Let’s walk through what your options will be when you’re trying to find coverage with a disability.
Table of Contents:
- Types of Life Insurance For Disabled Adults
- What Affects Your Life Insurance Premiums?
- Other Life Insurance Options for Disabled Adults
- Does Life Insurance Affect Your Social Security Benefits?
- Tips to Getting The Best Rates on Life Insurance Coverage
Types of Life Insurance for Disabled Adults
We’ve noticed that people who are curious about life insurance for disabled individuals tend to ask the same questions, such as what type of life insurance should I get with my disability?
There are multiple types of coverage through a bounty of companies. Let’s look at the main types of insurance:
- Term Life Insurance: Term life insurance will cover you for a specified amount of time, often 10 to 20 years. If you outlive your policy, the company keeps all the money you paid in premiums.
- Whole Life Insurance: Whole life (also called permanent life insurance) ensures that if you outlive your policy, you get reimbursed for all the premium payments throughout the years. As long as you pay the monthly payment, you are covered. This type of life insurance also has a cash value component you could borrow against if needed. The difference will be subtracted from your premium at the time of your death.
- Burial or Final Expense Insurance: If you are denied one or both of the above options, you can still get a smaller amount of coverage through Burial or Final Expense Life Insurance. Most companies do not require a medical exam or ask health questions. Often, coverage can start the same day.
- Employer-Provided (Group) Life Insurance: Many companies will offer and even pay for their employees’ coverage as part of an employer group policy. The only caveat is you would lose the coverage if you changed jobs.
If you are familiar with your choices and ready to get quotes, use the form on this page to explore your options.
What Factors Influence Premiums For Disabled Adults?
From the perspective of life insurance companies, your application and your disability boil down to this single question: How is your overall health with your disability?
Non-Life Threatening Disability
If your disability will not shorten your anticipated lifespan, insurance underwriters will ignore your disability and you should qualify for coverage like anyone else.
For example, a person who has lost a limb but has a prosthetic, and is fully functional and healthy, will probably qualify for standard life insurance rates just like someone without a disability.
Insurers also assess health on a case-by-case basis. If you have only a minor form of your disability, your application will be deemed less risky than someone who has a serious disability.
Accident-related disabilities are “easier” to insure versus a health-related disability. It always comes down to how your specific disability directly affects your mortality.
Examples of Non-Life-Threatening Disabilities:
- Mental disabilities such as:
- Bi-polar Disorder
- Pain Disorders
- Skin Conditions
- Spine or joint disorders
Don’t be disheartened if one company denies your coverage because of a life-threatening disability. Each company uses a different set of standards to categorize applications.
Categories range from above-average health, average health, substandard health, and high risk. You may be deemed “substandard health” by one company but “average health” by another. These categories will impact the cost of your coverage.
If you’re consistently categorized as high-risk, check with an independent life insurance agency like ours. We know the nuances of each insurer’s underwriting rules. Our agents can find the companies most likely to categorize you more favorably.
Understanding how your disability will be viewed by the life insurance company, and then minimizing the risk the company would take by insuring your life, will be key to finding the best coverage.
This holds true for any person getting life insurance.
Examples of Life-Threatening Disabilities:
- Heart Problems
Other Life Insurance Options For Disabled Adults
No Exam Life Insurance with a Disability
As we mentioned above, no medical exam life insurance policy is an option for people with a disability.
As the name implies, you can skip the health exam and still get coverage with a no-exam policy.
These plans are ideal for consumers with a lengthy medical history or for applicants who are going through a current medical crisis.
But be aware: No medical exam policies cost a lot more — and they limit the amount of protection you can buy.
That’s why no-exam policies should be a last resort for life insurance. Even if you’ve been denied a term plan in the past, we can still help you find a company that will accept your application and gives you a quality and affordable life insurance plan.
Employer Provided Life Insurance
Most employer-provided life insurance plans are group plans. This means you typically do not have to fill out a health questionnaire or take a medical exam to get insured.
This is possible because the group distributes the risk your coverage presents to the insurer.
So yes, in most cases you can get life insurance from your employer’s group life insurance plan.
But there are two downsides to a group plan:
- Coverage Limits: Group plans have lower caps on death benefits. If you need a large lump sum, you’ll need to buy your own individual plan.
- Job Dependent: Employer group plans do not usually follow you from job to job. If you stop working for the employer who offers the group plan, you’ll no longer have coverage.
Pre-Existing Conditions Clause
Another possible coverage option for someone with a disability comes from the pre-existing conditions clause built into a standard life insurance policy.
Through this clause, the insurer agrees to sell you life insurance and to pay your death benefit unless you pass away as a result of your disability.
For many people, this coverage is worth the risk. It can significantly lower your premiums and provide coverage if your death was unrelated to your disability.
Group Life Insurance Options Through Medicaid
If your income qualifies you for Medicaid, you could have some group options for life insurance through that program.
The options are limited and fairly expensive, but they are available if you qualify financially.
Does Life Insurance Affect Your Social Security Benefits?
Keep in mind that while applying for a new life insurance policy, the government cannot directly interfere, however, your policy may affect your supplemental security income.
Permanent life insurance policies contain a cash value. Should you pull out some of that cash, your SSI can be affected. How?
That money you pulled is considered unearned income, directly affecting your ability to receive your Social Security Benefits.
Social Security Income is determined by the following factors:
- Resources you possess
- Current Assets
- Ability to earn (here is where life insurance can interfere)
When applying for SSI, you must disclose any cash value you may gain from your permanent life insurance to the SS Administration.
If you are already receiving benefits, you will need to alert the SS Administration to any new whole life policies you receive.
Now, if you apply for term life insurance, your SSI will not be affected. Term life policies offer no cash value, therefore they do not have any effect on your benefits.
Tips to Getting Affordable Coverage For Disabled Applicants
When you’re looking for cheap life insurance, you can secure lower insurance rates from the company by following a few steps.
Completing these steps and tips can help you save money on life insurance plans.
Smoking drastically increases your chances of being declined for life insurance coverage, especially if you have any additional health complications on your medical record.
If you want to get the lowest premiums for your insurance plan, just quit the habit. Our recommendation is to stop using tobacco altogether or prepare to search hard for coverage and pay double the rate of premiums of non-users.
This now applies to vaping and e-cigarettes, too.
Eat a Healthy Diet
The next step will be to change your relationship with food. Over time, changing your food lifestyle can help lower your blood pressure, lower your weight, and maintain a healthy mindset.
Shifting your relationship and understanding of food can reduce your chances of being diagnosed with severe health complications later. This will directly impact your future life insurance premiums.
You can still enjoy your favorite foods, but making healthier choices that you can sustain can help you qualify for lower life insurance premiums
Compare Quotes from Top Providers
Every insurance company has different medical underwriting; they all view applications differently and offer drastically different rates depending on the rigidity of their underwriting.
So the final tip we have is to contact an independent agent who will work for you instead of the insurance carrier.
If you want to get the lowest rates, shop around and compare quotes from dozens of companies before deciding which one works the best for you and your budget.