Understanding Life Insurance for the Disabled

Life insurance can be a valuable resource for people with disabilities. You might assume that having any kind of disability would mean you'll only be quoted daunting premiums or automatically be precluded from coverage. But that's not always the case.

Whether you're shopping for a new policy or looking to add a rider to an existing one, there are several options that could suit your unique circumstances. Here's what you need to know about eligibility, no medical exam life insurance, premiums, riders and more.

Life Insurance Needs for People With Disabilities

Having a disability doesn't mean you're out of the running for life insurance coverage. Many factors go into the underwriting process, which determines each individual's coverage eligibility.

The specifics of your disability are important when insurance companies evaluate your eligibility for coverage. For example, if your disability doesn't impact your life expectancy, it shouldn't hinder your ability to qualify for a life insurance policy.¹ In other situations, a disability could make it more challenging to obtain coverage — or simply more expensive.

Ultimately, disabilities vary considerably from person to person. A disability can be physical, cognitive or social, among other characteristics.² Every person's situation differs, so it's best to meet with a trusted financial professional when determining your eligibility. They will be equipped to help you understand your options while also weighing other important factors, such as your lifestyle and other health considerations.

Do Disabilities Impact Premiums?

It's possible that your disability will influence the premium for a life insurance policy. Life insurance premiums are calculated based on risk factors, including your age and health conditions.

However, in some cases, a disability may not present risk factors that affect your premium. If you are temporarily disabled due to an accident, for instance, this may not impact your life expectancy and would not necessarily increase your life insurance premium. But if, let's say, your disability is the result of a chronic medical condition, particularly if it decreases your life expectancy, it could mean a difference in your premium.

Whether you think your disability will affect your premium or not, you must disclose it and any other health conditions in your application for life insurance. If an insurance provider learns that you failed to disclose a known condition, they can deny or cancel coverage.

Must I Take a Medical Exam?

Applying for life insurance often requires a medical exam to assess your health. This often entails bloodwork and always includes a review of your health history. Insurance companies then assess the results to determine eligibility and coverage limits.

However, not all policies require a medical exam. No medical exam life insurance is one option for life insurance for people with disabilities. These policies allow you to skip the medical exam, but they also tend to come with more restrictions and limitations than standard policies. They can also be more expensive.

Before moving forward with a no medical exam life insurance policy, research all your options. You may be surprised to find that some policies may be flexible when it comes to providing coverage to individuals with disabilities.

Life Insurance Riders for Policyholders With Disabilities

If you or a loved one has a disability, you may want to consider adding a rider to your life insurance policy for extra protection and confidence. Riders can provide protection on top of an existing policy, offering the opportunity to customize coverage.

Here are a few riders you may want to learn more about:

• Accelerated death benefit rider. This rider allows you to access some of your policy's death benefit while you're still alive, which could be beneficial to potentially offset costs associated with your disability. Note: Living benefits are accessed through an advance of the policy's death benefit, provided the insured meets eligibility requirements under the applicable rider. An advance is treated as a lien against the policy and will reduce the Death Benefit payable if not repaid. The advance will accrue interest each year. The lien may be increased if necessary to keep your policy in effect. We may charge a fee of up to $250.00 for an advance payment. The accelerated death benefit will terminate with the policy.
• Waiver of premium rider. If you ever become disabled and unable to work, this rider waves your insurance premium.
• Child term coverage or spousal rider. These riders pay a death benefit if a spouse or child dies before you. If your child or spouse has a disability, it may be worth seeing if you are eligible to add one or both riders to your policy.

Finding Coverage That Suits You

It is absolutely possible to obtain quality life insurance coverage when living with a disability. While there may be more considerations to take into account, there are several options for purchasing life insurance for people with disabilities. If you're interested in reviewing available plans and related riders, reach out to a financial professional who can offer personalized insight and guidance.

Sources

1. How to qualify for life insurance with a disability. https://www.forbes.com/advisor/life-insurance/life-insurance-with-disability/.
2. What are the Different Types of Disabilities?. https://cpdonline.co.uk/knowledge-base/care/different-types-of-disabilities/.