How to Qualify for Disability Life Insurance – Forbes Advisor
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About 40.6 million Americans have a disability, according to the US Census Bureau. For Americans with a disability, eligible for life insurance often poses a challenge. Since insurers view applicants with disabilities as a greater risk, it can be more difficult to find suitable coverage options.
But there are coverage options at your fingertips. So if you have a disability, here’s how to qualify for life insurance and some alternative options if you find that you can’t qualify.
Can you qualify for disability life insurance?
Even if you have a disability, you may still be eligible for life insurance as long as your disability does not affect your life expectancy. And the nature of your disability will affect the policy choices available.
“If you are disabled due to a physical disability such as blindness or deafness, you may be eligible for a traditional term insurance policy, especially if your loved one has life insurance. In this situation, most life insurance providers will allow you to purchase a policy that provides at least half of the coverage your spouse has for you, ”says Cliff Pendell, vice president of marketing and operations at JRC Insurance Group.
If your disability affects your life expectancy, it can impact a life insurance policy in these ways:
• Higher premiums
• Limit life insurance options
• Disclaimer of coverage
If your disability is severe enough or you have other aggravating health conditions such as heart problems, most traditional life insurers will likely deny your claim.
Medical conditions that may prevent you from getting life insurance
A back injury that does not affect your life expectancy is unlikely to affect your life insurance rates. But conditions like PTSD, anxiety or depression could, according to Mike Raines, owner of Raines Insurance Group.
Since underwriting processes vary from one life insurance company to another, it is difficult to identify the disabilities that will automatically result in denial of the claim. However, these conditions could affect your rates or your ability to obtain coverage:
• Post-traumatic stress disorder (PTSD)
• Cerebral palsy
• Advanced stages of multiple sclerosis
But generally, if you are in good health apart from your disability, insurance companies might be willing to approve a life insurance policy, unless you take large doses of pain relievers or narcotics that you are taking. might be addicted.
Although underwriting guidelines vary from company to company, the process of buying life insurance revolves around predicting your life expectancy (called mortality by insurers). You will be grouped into a life insurance underwriting category depending on your condition and other factors that may affect your life expectancy. The pricing category will help you determine your rate.
How To Qualify For Disability Life Insurance
There are things you can do to increase your chances of receiving a more affordable rate and qualifying for the coverage you need.
Work with an experienced professional
The best strategy is to work with an experienced life insurance agent who will know which companies are most likely to offer coverage to people with your condition. They should be able to anonymously review your request to see who is ready to offer coverage.
Buyers of life insurance with disabilities shouldn’t try to fend for themselves by getting quotes online and submitting claims that might be refused. Refusals are recorded in your file and can make it even more difficult to purchase life insurance.
Apply for an appropriate amount of life insurance
Suppose someone had a back injury and is now disabled. Let’s say they only earned $ 20,000 a year before their injury and are now on disability. In this case, the insurance company may limit the coverage to a small amount.
On the flip side, let’s say someone runs a family business and has a net worth of $ 2.5 million. In this case, you would have a much better chance of securing a large amount of life insurance to cover financial obligations and business succession.
“If you can demonstrate a good financial rationale for the coverage, you may have a better chance of being approved,” says Raines.
Work on your health
It is important to focus on your health when applying for life insurance. Since insurance companies prioritize healthy people despite a disability, it is wise to be as healthy as possible.
Here are some ways to be healthier:
• Follow your medical treatment. Insurers favor applicants whose medical conditions are under control. So if you are not following the medical recommendations, it is wise to start.
• Exercise and eat well. Exercise helps regulate your health and general well-being. But, if it is difficult to binge because of a disability, choose a healthy diet.
• Regulate your blood pressure. If you have high blood pressure, be sure to take the right steps to keep it under control.
• Stop smoking. Smoking is a major risk factor for premature death. While it can be difficult to stop this nicotine, stopping it can help improve other risk factors you may have as a result.
Life insurance options if you are denied coverage
If you don’t qualify for traditional life insurance coverage, there are other options available to you. Depending on your needs and your particular situation, here are several options to consider.
Guaranteed Issue Life Insurance
With or guaranteed acceptance or guaranteed issue life insurance, you cannot be turned down and there are no medical questions or life insurance medical exams. The tradeoff is that the coverage limits are minimal and often range from $ 5,000 to $ 25,000 in coverage.
These policies also have graduated death benefits. Your beneficiaries will not receive the full death benefit if you die within two or three years of taking out the contract, unless you die as a result of an accident. It’s a way for insurance companies to protect themselves from seriously ill applicants who know they don’t have long to live.
Life insurance for disabled veterans in service (S-DVI)
Some disabled veterans may be eligible for life insurance through the US Department of Veterans Affairs. Service-related Disabled Veterans Life Insurance provides low-cost coverage for eligible military members with a service-related disability. Service members must apply for at least two years from the date they were granted a service-related disability, be in good health and not receive a dishonorable discharge.
With S-DVI, service members can receive up to $ 10,000 in coverage. If a service member becomes totally disabled and is unable to work, you may receive additional coverage up to $ 30,000.
Group or complementary life insurance
Many employers have a group life insurance plan that provides affordable life insurance for workers. You usually don’t have to go through an underwriting process in order to receive basic coverage, such as coverage equal to one year of your salary.
Some group life insurance policies may also have additions such as waiver of premiums, which helps maintain coverage but eliminates premium payments for employees who become totally disabled. Generally, to be eligible, you must have been disabled for at least 180 days and be under the age of 60.
Funeral and burial insurance
Funeral and funeral insurance the policies are designed to help beneficiaries pay for final expenses such as funeral costs. These policies generally do not require a medical examination, and the application may have minimal or no health issues.
Joint Survivor Life Insurance
Also known as second death insurance, survival life insurance insures two lives under one policy. Instead of paying the death benefit on the death of a person, this policy only pays the death benefit when both insureds die, for example two spouses.
These policies are often used to pay estate taxes, fund a trust for a child with special needs, or leave an inheritance to other heirs.
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