Can People With Disabilities Get Life Insurance?

iQuanti: If you or someone you love has a mental or physical disability, you may think life insurance is off the table. And since many insurers enforce medical examinations before approval, it can be difficult to understand what would and would not disqualify someone from coverage. But not to worry: many people with disabilities can get life insurance. There may just be some added steps and cost to work through, but the time and money spent are well worth it to secure the coverage you need. Here's what you need to know about getting life insurance for people with disabilities.

What do life insurance companies consider a disability?

There is a wide range of medical conditions that are classified as disabilities. The underlying similarity between them is that the disability makes it more challenging to perform some activities or generally interact with the world. Some of the primary categories of disability are:

• Movement
• Communication
• Mental Health
• Hearing, Vision, and Other Senses
• Thinking and Remembering

And while some disabilities, like the loss of a limb, may be easily seen, others, like mental health issues, may not be as obvious. But as far as insurers are concerned, the impact of the disability on your overall life expectancy is a critical factor in determining how much life insurance you should get and what premiums you'll pay.

How do life insurance companies assess a disability?

There are several key things life insurance companies need to know for an applicant that presents with a disability, including:

• The cause: Disabilities can be caused by many factors, from accidents to chronic illness. And life insurance companies want to understand the cause to gauge its impact on overall mortality.
• Whether the disability is permanent or temporary: Temporary disability, like those that result from an accident, will likely be considered differently than a chronic or permanent disability.
• If you can continue working or not: A disability that prevents you from working and earning an income may affect the amount of life insurance you can buy.
• Overall health: The insurer will want to understand general health and lifestyle information, including if you use tobacco products.

Life insurance benefits and options

Those with disabilities may consider life insurance for a number of reasons. A primary reason is to support loved ones financially in the event of your untimely passing. For example, the proceeds from a life insurance policy can replace income, pay for burial expenses, or pay off debts. And further, it can give you peace of mind that your family and loved ones will be financially cared for after you're gone.

There are two broad categories of life insurance: term life and whole life. The key differentiator between these two options is that a term life insurance policy covers you for a specific period, often between 10 and 30 years, while a whole life policy is for the duration of your life, assuming premiums are paid.

A term life policy will result in a guaranteed payout if you pass away during the policy's term. But once the term expires, the benefit is no more unless you choose to renew the policy for a new term, likely at a higher premium.

On the other hand, a whole life policy can accumulate cash value, making the premium payments slightly more expensive than a term policy. But a whole life policy offers coverage for life, which can be helpful for those with disabilities that may cause declining health over time.

Depending on the extent and severity of the disability, insurers may enforce higher premiums for both term and whole life policies. For this reason, it's wise to shop around with various insurers to assess coverage options and costs.

The bottom line

Life insurance is still an option for those with disabilities; it just may cost a bit more and have a more in-depth vetting process. That's why it's important to speak with an experienced professional to help guide you through the process and find the right product for your situation and budget.