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According to the Centers for Disease Control and Prevention (CDC), 61 million adults in the United States live with a disability. Those living with a disability, representing 26% of American adults, may place even more importance on financially protecting their families with a life insurance policy. But because insurers view applicants with disabilities as a greater risk, it can be harder for those with disabilities to find suitable coverage options.
Fortunately, you can still qualify for life insurance even if you have a disability. Here's how.
Can You Qualify for Life Insurance With a Disability?
The Americans with Disabilities Act (ADA) prohibits life insurance companies from denying policies for those living with disabilities unless their disability affects life expectancy. In that case, your coverage options may be limited.
According to the ADA, a person with a disability is someone "who has a physical or mental impairment that substantially limits one or more major life activities." Major life activities are essential daily functions for most people, including:
- Breathing
- Walking
- Talking
- Hearing
- Seeing
- Sleeping
- Self care
- Working
Major life activities may also include necessary bodily functions like digestive, bowel, bladder, circulatory and reproductive functions.
When you apply for life insurance, the insurance company will consider the type and severity of your disability when setting your health classification and premiums. How they evaluate your risk level will vary by insurer. As with any policy, life insurance companies will also consider other important factors, including your income, lifestyle and health history.
Does a Disability Affect Life Insurance Costs?
While the law prohibits insurers from denying life insurance for someone with a disability, they are allowed to consider how your disability affects your health and life expectancy. Consequently, your disability can influence the types of life insurance coverage and premiums you receive.
The more a disability impacts your life expectancy, the more it may influence your coverage options and price. Generally, the higher the risk, the higher the premiums. Since research indicates loss of hearing doesn't affect life expectancy, it may be easier for a deaf person to qualify for life insurance. By contrast, adequate coverage could be trickier for someone with severe cerebral palsy or epilepsy, which are both known to influence life expectancy.
Life insurance companies also take into account how well you're managing your disability with medications, treatments and procedures. Insurers additionally consider your current job status and whether you're still able to work when setting policy coverage amounts.
Tips to Qualify for Life Insurance With a Disability
Here are a few ways you can improve your odds of qualifying for the life insurance coverage you need with affordable premiums.
Improve Your Health
It's wise to focus on your health before applying for a life insurance policy. Since life insurers pay close attention to your health history, improving your health could make a big difference in your coverage and price.
Set realistic goals and take consistent steps to get healthier. As you do, keep in mind that insurance medical exams primarily focus on your blood pressure, height-to-weight ratio and smoking status. Any improvements in these areas could help you qualify for life insurance, potentially with lower rates.
Work With an Agent
Enlisting the help of an insurance agent or broker who works with multiple insurance companies may help you qualify for life insurance. These agents may know which insurers are more likely to issue coverage, and they can submit anonymous queries on your behalf. By doing so, you may determine whether a company might be more likely to approve your full application for coverage.
What to Do if You're Denied Coverage
If your disability prevents you from qualifying for traditional life insurance, you still have options. The following options can provide financial protection for your loved ones:
- Guaranteed issue life insurance: As its name implies, guaranteed issue coverage is guaranteed to be issued, and you don't have to take a medical exam for approval. However, the trade-off is that premiums are usually higher and the death benefit may be less than $25,000. Additionally, the benefit can be reduced if you die within two or three years of the policy's issue date. Qualifying for no-exam life insurance may be more challenging if you're older than age 60.
- Group life insurance: You may be able to get group life insurance through your employer or another organization. Your employer may pay most or all of the premium, and you won't have to take a medical exam. Unfortunately, coverage amounts are typically limited, but you may be able to buy additional term life insurance at the lower group rate.
- Joint life insurance: Getting a joint life insurance policy with a spouse is one way to get more insurance coverage. But depending on your policy plan, your coverage could end if your partner dies before you do, or your plan may not pay the death benefit until you both perish.
- Service-Disabled Veterans Life Insurance (S-DVI): If you have a service-related disability, you may qualify for life insurance through the Department of Veterans Affairs. You may receive up to $10,000 of coverage and up to $30,000 of supplemental coverage if eligible.
The Bottom Line
In most cases, it's possible to get life insurance if you have a disability, although you could have fewer plan options and higher premiums. By working with an agent, you may be able to find sufficient life insurance coverage for your needs, and you may even receive multiple offers.
Don't forget, some states allow insurance companies to consider your credit when calculating premiums using a credit-based insurance score. If you happen to live in one of those states and have good credit, you might snag a lower premium. Before you apply for life insurance, you may want to check your free Experian credit report and credit score to get an idea of where your credit stands.