Life Insurance For Disabled People: Is It Possible?

Life insurance is a crucial tool for financial protection, and it is available to people with disabilities. While a person's disability status does not automatically disqualify them from obtaining life insurance, it is one of several factors that insurers consider when evaluating their risk and setting premiums. This means that a disability may impact a person's ability to get life insurance and the cost of their premiums. The nature and scope of the disability, its effect on overall health and life expectancy, and the ability to work are all considered when determining eligibility and rates. People with disabilities have the same choices for life insurance as anyone else, including term life and whole life policies, but they may also have additional options like guaranteed issue life insurance and group life insurance.

What is considered a disability?

According to the World Health Organization, disability has three dimensions:

• Impairment of a person's body structure or function, or mental functioning. Examples include loss of a limb, loss of vision, or memory loss.
• Activity limitation, such as difficulty seeing, hearing, or walking, or problem-solving.
• Participation restrictions in normal daily activities, such as working, engaging in social and recreational activities, and obtaining health care and preventive services.

Disabilities can be related to conditions present at birth, such as Down syndrome or autism spectrum disorder, or they can be acquired later in life due to injury or illness.

In the United States, the Social Security Administration (SSA) defines a person as disabled if they meet the following criteria:

• The person has a physical or mental condition that results in the inability to engage in any substantial gainful activity.
• The condition can be expected to result in death or has lasted/is expected to last for at least 12 months.
• The condition significantly limits the individual's ability to perform basic work activities.

The SSA recognizes disabilities under 14 categories:

• Musculoskeletal disorders
• Special senses and speech
• Respiratory disorders
• Cardiovascular system
• Genitourinary disorders
• Hematological disorders
• Congenital disorders affecting multiple body systems
• Neurological disorders
• Cancer (malignant neoplastic diseases)
• Immune system disorders

It is important to note that the definition of disability may vary depending on the specific insurance company, government program, or other context.

Does the Americans with Disabilities Act protect my right to life insurance?

The Americans with Disabilities Act (ADA) does not guarantee a disabled person's ability to qualify for life insurance. However, it does require that they receive equal access to life coverage. This means that insurers must make their policy applications, as well as their physical and electronic properties, user-friendly for those with disabilities.

So, while an insurer can still charge higher life insurance premiums or reject an application based on factors tied to a disability if they would also affect life expectancy, in many cases, a disability has little to no impact on life expectancy. In these instances, a disabled person may likely be able to apply for any life insurance policy and get the same consideration they would get without their disability.

The ADA is a civil rights law that was passed in 1990 to protect the civil rights of disabled people. According to the ADA, a disability is "a physical or mental impairment that substantially limits one or more major life activities," including breathing, walking, seeing, communicating, hearing, learning, and sleeping.

The ADA provides broad protections in areas such as employment, public services, public accommodations, transportation, and telecommunications. It requires entities covered by the Act to make "reasonable modifications" in activities, programs, and services for qualified individuals with disabilities.

While the ADA does not guarantee the right to life insurance for disabled individuals, it does prohibit discrimination and ensure equal access to life insurance options.

When does a disability impact your ability to get life insurance?

A disability can impact your ability to get life insurance if it is connected to a condition that might reduce your life expectancy. For example, if your disability is caused by a serious health issue such as cancer, diabetes, or a traumatic injury, you may find that insurers charge higher premiums or even reject your application.

Similarly, if you have a mental disability, such as major depression, insurers may be concerned about the potential for self-destructive behaviours, and this could affect your access to life insurance or the cost of a policy.

However, if your disability does not affect your life expectancy, it is likely that you will be able to apply for any life insurance policy and receive the same consideration as someone without a disability.

How can I get life insurance with my disability?

Having a disability does not disqualify you from getting life insurance. However, depending on the type and severity of your disability, you may have limited options and higher premiums.

Understand how your disability affects your insurance options

The nature of your disability, its impact on your life expectancy, and your overall health will determine your insurance options.

Disabilities that do not affect life expectancy, such as loss of vision or hearing, may allow you to qualify for traditional term policies, especially if your spouse also has life insurance.

If your disability affects your life expectancy, you may face limited options and higher premiums. Severe disabilities or compounding health problems may result in application denials from traditional life insurance providers.

Work with an experienced professional

Engaging an experienced life insurance agent who understands the specific needs of clients with disabilities is crucial. They can anonymously shop your application to find insurers most likely to offer coverage.

Avoid submitting applications on your own, as denials can make it harder to get approved in the future.

Apply for an appropriate amount of coverage

The amount of life insurance you can obtain may depend on your financial situation and net worth. Ensure the coverage amount aligns with your financial obligations and needs.

Improve your overall health

Focusing on your health can increase your chances of obtaining life insurance and securing more affordable rates. Here are some suggestions:

• Follow medical treatments: Adhering to recommended treatments and keeping medical conditions under control is favourable to insurers.
• Exercise and diet: Regular exercise and a healthy diet can improve your overall well-being. If your disability limits physical activity, focus on maintaining a nutritious diet.
• Regulate blood pressure: Take the necessary steps to manage high blood pressure.
• Quit smoking: Smoking increases the risk of premature death and negatively impacts other health factors.

Explore alternative insurance options

If you cannot qualify for traditional life insurance, there are alternative options available:

• Guaranteed Issue Life Insurance: This option provides guaranteed coverage, typically with minimal questions or exams, but offers lower coverage amounts and graded death benefits.
• Service-Disabled Veterans Life Insurance (S-DVI): Disabled veterans may qualify for low-cost coverage through the U.S. Department of Veteran Affairs.
• Group or Supplemental Life Insurance: Many employers offer group life insurance plans that provide coverage without an underwriting process.
• Funeral and Burial Insurance: These policies are designed to cover final expenses and typically do not require medical exams or extensive health questions.
• Joint Survivorship Life Insurance: This type of policy insures two lives and pays out only after both policyholders pass away.

Compare insurance companies and shop around

Different insurance companies have varying criteria for determining eligibility and rates. It is essential to compare multiple insurers and get quotes to find the best coverage options for your specific needs.

Be honest and accurate in your application

It is crucial to be completely transparent about your disability and health condition during the application process. Misrepresenting or failing to disclose pertinent information can lead to policy termination or refusal of the death benefit payout.

Tips for disabled people looking for life insurance

• Shop around for the right policy: There is no separate life insurance for disabled people. However, some companies offer life policies specifically for disabled people, so it is worth shopping around. You can also get quotes from several insurers to find the best coverage for your needs.
• Work with an experienced professional: An experienced life insurance agent will know which companies are most likely to offer coverage for those with your condition. They can also anonymously shop your application around to see who is willing to offer coverage.
• Apply for an appropriate amount of life insurance: The amount of coverage you can get depends on your financial justification for coverage. For example, if you have a net worth of $2.5 million, you will have a much better chance of getting a high amount of life insurance.
• Focus on your health: Since insurance companies favor those in good health despite a disability, it is wise to get as healthy as possible. This could include following your medical treatment, exercising and eating well, and quitting smoking.
• Consider group life insurance: Many employers offer group life insurance plans that provide affordable life insurance to workers, often with no underwriting process required.

Frequently asked questions