Who Is Eligible For Life Insurance
Many people are eligible to enroll in life insurance. Because life insurance is offered through private companies, each provider has its own rules, plans, costs, and offerings. For some, enrolling in a life insurance plan is as simple as taking a health screening, determining the amount of coverage you need, and selecting an affordable plan based on your options. For others, the process may be more complicated.
When looking for a life insurance policy for a person with disabilities, it may become necessary to find a plan that does not require a medical screening for enrollment. Though these plans are less available, it may be an option for you. Many plans require those looking to enroll to submit a health history or take part in a medical exam to determine pre-existing conditions, which can then be factored into the price of monthly premiums.
Note: issuance of the policy may depend upon answers to health questions set forth in the application.
Life Insurance Options For People On Ssi Supplemental Security Income
If you receive SSI, supplemental security income, your options are very limited, but by no means a dead-end.
If you receive SSI, you are likely on Medicaid. As we wrote before, you can receive Medicaid and purchase life insurance. You just need to go about it the right way.
You see, receiving SSI is based on an asset and resource test. To make a very long story short, if you earn income and have assets above the SSI threshold, you will likely lose your SSI benefits.
Many agents get this wrong, to the detriment of the insured-applicant. Im floored about that. Even the social security administration states that cash-value life insurance is an asset resource. The same for burial contracts, which are also an asset.
Whole life insurance is an asset. That means a whole life insurance policy, guaranteed issue or a traditional burial insurance policy, could negatively impact your SSI benefits.
There are a couple of ways around this. You could:
have someone else, like a son or daughter, own the policy. He or she would be the owner. Having someone else own the policy on you does not affect your SSI benefits. We have helped many people in this regard. open a funeral trust and transfer or pay money into the trust. Medicaid cant get at the money in the trust. It is not an asset. It will not affect your SSI benefits.
utilize term life insurance. We work with one term life insurance plan that works well with people receiving Medicaid.
Insurance Policies For People With Special Needs
Even though premiums may be higher, a whole life policy that guarantees coverage for the lifetime of your child will ensure continued coverage if health conditions deteriorate over time. If your childâs health is stable and not likely to deteriorate over time, then term insurance may be less risky.
Due to the inherent risk of insuring a person with special health care needs, many companies establish guidelines for writing policies on individuals with disabilities and have separate allocations, referred to as the âtables,â regarding the cost of insurance. The company may rate certain conditions or possibly assign an insured person what is known as a âgraded life benefit.â
Other policies may be issued as well as charged based on the level of functioning of the insured. Thus the amount of insurance for which a high functioning person can qualify may exceed the amount issued to a person with more severe impairments. For illustration purposes, the following summarizes how at least one insurance company describes certain levels of functioning:
In each of the above descriptions, the underwriting decision of a company will depend on various issues such as the diagnosis, the presence of co-morbid disorder such as depression, anxiety and obsessive compulsive disorders, any history of seizures and epilepsy, level of intellectual functioning, IQ, and the ability to work and live independently.
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What To Do If You Think Youve Been Discriminated Against
While there are certain situations when insurers can refuse you or offer you special terms , there have been situations where people have been wrongly refused cover on the basis of their physical or mental health.
Under the Equality Act you can challenge an insurance provider if you think a risk assessment isn’t based on a reliable or relevant source of information.
If you think this has happened to you, you can first complain to the company involved and then, depending on the outcome, to the free Financial Ombudsman Service.
Disability Doesnt Automatically Mean A Life Insurance Denial
Each company’s underwriting department has a different set of rules. One insurer rejection doesn’t mean all companies will turn you down.
The same goes for insurance rates. One insurer may consider you a high risk and put you in a more expensive health status. Another may feel you pose a lower risk and give lower rates.
John Nichols, a board member for national nonprofit Life Happens and partner at Acrisure Insurance Wholesale Solutions, said people shouldnt assume that being disabled means a denial.
“There is definitely hope. That said, there are many types of disabilities and degrees of severity that may affect mortality. Generally speaking, disabilities caused by accidents are ‘easier’ to insure as many will have less of a negative effect on mortality. On the other hand, disabilities caused by illnesses are more complex depending on the severity and the impact on mortality. One example is cancer, which is more complex depending on when, what type, prognosis and more,” he said.
Nichols explained there are three broad categories for life insurance that people with disabilities face:
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Shop Around For Insurance Coverage
Some insurers have stricter limits on when they will issue life insurance for disabled individuals. That’s why it is especially important to shop around among different insurers to explore coverage options. Those who are disabled and who are interested in buying a policy should check with as many insurance companies as they can to find affordable protection.
Veterans Affairs Life Insurance
Veterans Affairs life insurance starts on Jan. 1, 2023, replacing Sevice-Disabled Veterans life insurance offerings.
Veterans with service-related disabilities can receive guaranteed acceptance whole life coverage in $10,000 increments up to $40,000 with VALife. Your coverage with VALife goes into effect two years after you enroll, as long as youve kept up with your payments. If you die during the two-year waiting period, your beneficiary will only receive premiums paid plus interest.
All veterans age 80 and younger with a VA disability rating are eligible, and there is no time limit to apply. Veterans 81 or older who have previously applied for a disability rating before age 81 but received a rating after turning 81 are eligible to apply within two years of their rating.
If you have S-DVI, you can remain in that program. Or, you can apply for VALife, and if you do so before Dec. 31, 2025, you can keep S-DVI during the initial two-year waiting period for VALife.
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What Happens If Your Disability Gets Worse
If your disability gets worse while you have an existing policy, as long as you continue to pay the premiums your coverage will remain active for the remainder of the policy term. If, on the other hand, your disability worsens before you apply for an insurance policy, it will become more difficult for you to get approved. Your options may be limited to guaranteed issue life insurance a type of whole life insurance coverage that offers near-certain approval and is aimed at covering final expenses.
What Do Life Insurance Companies Consider A Disability
The specific definition of a disability can vary by life insurance company. In general, any condition that impacts mental or physical health can be considered a disability. Common examples include:
- Mental health issues including anxiety, depression, or PTSD
- Conditions affecting hearing, vision, or other senses
- Medical issues that impact movement
- Conditions that impact thinking, remembering, or communication
A disability may be something a person is born with. Or it may be acquired due to illness or injury over the course of their lifetime.
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Can I Qualify For Life Insurance If I Am Currently Receiving Ssa Disability Benefits
Yes, individuals who are currently receiving SSDI or SSI may be able to qualify for a traditional term or whole life insurance policy. In fact, some may even be able to qualify for a Standard or better rate!
The only problem is
That there are a lot of different reasons why an individual may be recieving SSA Disability Benefits, and while some reasons may not pose too much of a problem for a particular top rated life insurance company, many will.
Which is why one of the first things most life insurance agents are going to want to know, why have you been able to qualify for SSI or SSDI, before they move forward with your application.
Consider Guaranteed Life Insurance
There are a few life insurance policies that dont ask any medical questions or require a medical exam. Called guaranteed acceptance, these policies are available to any individual regardless of health. Guaranteed acceptance life insurance tends to have higher premiums and lower death benefits than traditionally underwritten policies, but its there if you need the coverage.
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What Parts Of Your Health History Do Insurers Look At
Insurance companies will evaluate several elements of your health history, including time since diagnosis, treatment plan, medication history, and any surgical history. They will also ask about the family health history of immediate biological family members, including parents and siblings. Insurers will also take a look at your employment, and ask if your health has ever impacted your ability to work.
Buy Through Your Employer
Employer-provided life insurance can be a solid choice for people with disabilities. Because employers offer policies that are part of a group plan, your health wont be a factor on your applicationonly your age and gender. Just keep in mind that many of these policies may end when your employment endsunless you have the option to convert it to a permanent policy
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Health Resources For People With Disabilities
Federal, state, and local government agencies and programs can help with your health needs if you have a disability.
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Explore the Disability and Health section of CDC.gov for articles, programs, tips for healthy living and more.
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Learn more about benefits for people with disabilities from the Social Security Administration.
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Contact your local city or county government to find out what medical and health services are available locally for people with disabilities.
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Your state social service agency can help you locate medical and health programs.
Visit USA.govs Government Benefits page to learn more about government programs and services that can help you and your family.
Can Ssi And Ssdi Recipients Have Life Insurance
Receiving either social security income or social security disability income doesn’t mean you can’t apply for life insurance. In life insurance calculations, both SSI and SSDI are treated as income. Neither disqualifies applicants from the right to buy life insurance. However, individual insurers determine rates and eligibility based on age and health factors.
Even in situations with higher health risks, you can often find whole life and other permanent life insurance policies. Be aware that any money withdrawn from the cash value of a permanent life policy will count towards income and impact how your SSI or SSDI is calculated.
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Lots Of Expensive Equipment To Cover
If your home has been adapted with expensive items such as stair lifts, hoists and bath lifts, make sure theyre all covered for accidental damage under your contents policy.
Dont be tempted to under-insure your contents. Add up, room by room, what everything would cost you to buy it again.
See our guides on home insurance to decide on the type and level of cover you need.
Factors To Consider While Purchasing A Term Insurance Plan For A Disabled Person
When purchasing a term plan for a disabled applicant, there are a few things to remember.
1. Coverage – You must verify that the term insurance plan’s coverage is sufficient to assist your beneficiaries through any financial difficulties that may arise as a result of your death. You can look up the sum assured and see if it’s adequate to pay your dependents’ annual expenses.2. Premium – The cost of purchasing term insurance for disabled people is typically higher than the cost of conventional insurance. Nonetheless, be sure the premium you’ll have to pay fits into your budget, so you don’t have to worry about missing a payment.3. Riders – Additional riders, such as accidental death benefit coverage, premium waiver riders, or long-term care riders, are frequently included with term insurance. Investing in riders can be especially beneficial for those with disabilities. As a result, be sure that the right rider is added to your term plan.
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What’s The Best Kind Of Life Insurance For A Disabled Person
You may easily qualify for a traditional type of life insurance like term life or final expense. But if your disability makes it difficult for you to qualify, you might consider these life insurance policies with no medical exam requirement:
- Simplified issue: These term and permanent life insurance policies work like traditional ones, but they don’t require a medical exam. Simplified issue life insurance policies typically have some health-related questions in the application, and they can be more expensive and provide less coverage than traditional policies.
- Guaranteed issue: Guaranteed issue policies don’t require a medical exam, and they don’t ask any health-related questions in the application. They’re more expensive and provide less coverage, but guaranteed issue term or whole life insurance can be a way for disabled adults to get a policy if they’re otherwise having trouble qualifying.
Worried you won’t qualify for traditional life insurance? to speak with a licensed representative who can walk you through the best options for your situation.
Life Insurance For People With Disabilities
Getting life insurance can be difficult for people with disabilities. In some cases, a person with a life-threatening disability can be charged a much higher premium. But there are many companies that specialize in offering life insurance for people with disabilities. There is now more opportunity than ever for people with disabilities to find a life insurance policy that will work for them.
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Whole Life Vs Universal Life
Whole life insurance policies are an older type of permanent life cover with fixed returns. They dont let policyholders change aspects of their coverage such as their premiums, death benefits, or investment component.
Universal life insurance is a newer type of permanent life cover that gives policyholders more freedom to adjust and change their coverage without the risk of losing their insurance.
If youd like to learn more about these different types of permanent life cover, check out our article here.
Where To Buy Life Insurance If Youre Disabled Or Have A Medical Condition
You might want to use a specialist broker to research the market for you and recommend a suitable policy. There are advisers and brokers that specialise in finding insurance for people who are disabled or have medical conditions.
The BIBA Find Insurance service can again help with this.
Alternatively, if you have a specific illness, try contacting the relevant charity for advice on life insurance.
For example, Cancer Research UK or Macmillan Cancer Support offers information about life insurance for cancer sufferers.
Its important to shop around and compare different insurers criteria and approaches can vary significantly between different providers. Some insurers may offer a life insurance policy with exclusions, which will pay-out in the event of a death, unless the death is a result of the disability.
Things to watch out for when buying life insurance on the Which? websiteOpens in a new window.
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You Can Have More Than One Policy
Depending on your circumstances and plans, you could decide to have more than one policy, and different kinds of policies. For example, it might make sense to get whole life insurance and supplement it with term life coverage as you’re paying your mortgage. That way, there are always two potential assets for your child: Before the house is paid off, there are potential benefits from the two policies. After the house is paid off, you have that equity plus the whole life policy.
If you’re married, you and your spouse can each have separate life policies. Depending on your situation, you may choose to designate your spouse as the primary beneficiary and the child’s trust as the contingent beneficiary. That way, when the first spouse dies, the death benefit goes to the surviving spouse when the second spouse dies, the benefit goes to the child’s trust.
There’s another possibility that could be simpler and more affordable: A life insurance company may offer “survivorship” joint life insurance. These are whole life policies that cover both parents but only pay a death benefit when the last parent dies. This is typically less expensive than having two individual policies, and can make the application process easier for a spouse with health conditions.
Guaranteed Issue Life Insurance
With guaranteed acceptance or guaranteed issue life insurance, you cant be turned down, and there are no medical questions or life insurance medical exam. The trade-off is that coverage limits are minimal and often range from $5,000 to $25,000 of coverage.
These policies also have graded death benefits. Your beneficiaries wont receive the full death benefit if you pass away within two or three years of buying the policy, unless you died from an accident. Its a way the insurance companies protect themselves from applicants who are severely ill and know they dont have long to live.
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