Those with a disability need life insurance for the same reasons as everyone else. It helps secure the financial future of your loved ones when you pass away.
Life insurance benefits can also be used to pay final costs (like medical bills and funeral expenses), cover unpaid debts, offset estate taxes, and replace lost income. The benefits can even be used as charitable donations.
Unfortunately, those with a disability often find it more difficult to qualify for life insurance coverage. The reason for this is many disabilities, though certainly not all, are considered high risk by life insurance companies.
That’s where we’re here to help. We work with the top insurance providers, including those who commonly insure the disabled, so you can find the best coverage for the lowest rate, despite your disability.
Here’s what you need to know about finding life insurance while on disability.
Finding Affordable Life Insurance While on Disability
A recent report by the U.S. Census Bureau shows 20% of Americans are disabled.
The organization found limited mobility is the most common disability. Limited mobility is defined as “serious difficulty walking or climbing stairs.”
Thinking and memory disabilities come in second. The study found 1/3 of all disabilities in the U.S. are related to thinking or memory.
Though limited mobility and thinking/memory disabilities make up the vast majority of disabilities in the country, countless other disabilities exist. These include vision disability, self-care disability, and independent living disability.
So, what exactly is a disability?
The Disability Discrimination Act defines a disability as a physical or mental condition which prevents a person from working or carrying out normal day-to-day activities.
Many of those who are disabled receive benefits from the government. Known as Social Security Disability benefits, they are paid to you and certain family members. Though not everyone with a disability qualifies for such benefits, a large portion of them do.
Understanding the relationship between your disability benefits and life insurance is important. They’re two very different things. Just because you receive disability benefits doesn’t mean you don’t need quality life insurance coverage as well.
Our Application Process
Finding life insurance with a disability can be difficult. Most life insurance companies simply don’t want to take on clients who pose an undue risk.
These companies don’t want to insure clients who have a lower-than-average life expectancy. Unfortunately, those disabled by a serious condition often do have a greater risk of premature death.
This is where working with an independent agent like us comes into the picture. We direct you to those companies most willing to work with disabled clients posing a greater-than-normal risk.
Here are a few of the areas you can be sure each life insurance company will ask about during the application process.
Overall Health – How is your overall health? Do you have any other conditions in addition to your disability? Those who are healthy all around, aside from their disability, tend to receive better rates.
Diet, Exercise, Lifestyle – Life insurance companies want to know you’re working to maintain your health. A healthy diet and regular exercise are so important. Not smoking is another surefire way to increase your chances of qualifying for traditional coverage.
Type of Disability – Different types of disabilities are treated differently. Physical disabilities tend to be looked at more favorably than mental disabilities.
Disability History – When were you diagnosed with your condition? What is the exact nature of your disability? How has it progressed since then? Has it become better, worse, or stayed the same?
Treatment – Most disabilities are long term and even permanent. Yet life insurance companies still value those who are actively working to improve, or at least maintain, their current condition. Those taking medications to treat their disability should also provide proof from a doctor to show substance abuse isn’t an issue.
As long as your disability isn’t life threatening and you’re otherwise healthy, you have a very good chance of receiving traditional life insurance coverage, though you wouldn’t be eligible for certain riders, like the disability waiver of premium or disability income rider.
Examples of disabilities commonly qualifying include arthritis, ADHD, blindness, chronic back pain, skin conditions, and controlled diabetes.
If your condition is more serious, you might have to look at alternative forms of coverage. Luckily, there are a wide variety of alternatives available to choose from.
Common Results For A Policy
Many life insurance companies deny potential clients outright simply because they receive disability benefits.
It’s best to avoid these companies from the start. We match you up with companies who actually review your application, despite your disability.
Those with disabilities which aren’t life threatening often qualify for a Standard or Mild Sub-Standard rating. Those who are in particularly good health, aside from their disability, even have a chance of receiving a Preferred rating, though it’s rare.
However, those with disabilities affecting their life expectancy will usually be denied, or rated at a High Sub-Standard for traditional coverage. This means very expensive coverage, or none at all… yet there’s still hope.
Numerous providers specialize in insuring high risk clients. The alternative forms of coverage offered include guaranteed-issue life insurance, graded life insurance, and group life insurance. The downside is these policies tend to be more expensive and provide limited death benefits.
Simply put, a life insurance company takes the specifics of your situation into account during the application process. It’s impossible to give an estimate on the type of coverage you’ll receive without knowing the specifics of your disability and overall health.
What to Do Next
There’s no need to worry when applying for life insurance while on disability.
Though many people do qualify for traditional coverage, usually at a higher-than-normal premium, those who don’t have plenty of alternatives to choose from, too.
We’re happy to help you find a company willing to offer you what you deserve, no matter the specifics of your situation. We work with the top rated companies in the country and can likely find several willing to offer you coverage.
If you want to find the lowest life insurance premiums while on disability, we can help.