A Guide to Life Insurance for Disabled Individuals

Learn about the different life insurance options available to people with disabilities.
By Mike Parker
Updated Sep 8, 2022
A woman in a wheelchair who is happy because she will still be covered by Life Insurance.
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Living with a disability can make getting a life insurance policy complicated. People often think that they won’t be approved, or that they’ll have to pay higher premiums for life coverage if they are disabled.

But with the right advice and approach, most disabled people can buy life insurance to secure their family’s wellbeing after they die.

This article will explore life insurance for disabled individuals. We’ll go over the different insurance options, tips for finding life cover as a disabled person, and how conditions may affect eligibility and costs.

What Is Life Insurance?

Life insurance policies are contracts that guarantee a payout when the policyholder dies. In return, policyholders pay premiums (monthly, annual, or one-off) throughout their lives or for the length of the contract.

There were limited options for life cover in the past. However, these days you can choose from various plans. Most insurers offer:

  • Policies that will cover people for specific periods, such as term life cover.

  • Permanent life coverage with flexible premiums and death benefits, such as universal life insurance).

  • Expense-specific life cover options, such as mortgage life cover.

Disabled people can buy many different plans, and some insurers even offer specialized policies for people with specific disabilities. 

What Is a Death Benefit?

A death benefit is the amount of money a life insurance policy will pay if the policyholder dies while the contract is valid and in force.

Death benefits are also known as the face value or cash value of a life insurance contract.

A woman happy with her Insurance plan.

Source: Pexels

Life Insurance vs. Disability Insurance

Some people confuse life insurance and disability insurance, but knowing the difference is essential for proper life coverage.

Disability insurance will cover you if you become disabled or suffer a permanent injury that forces you to work less, or to stop working altogether.

A life insurance policy will pay out a death benefit, but it will not cover injury or disabilities unless you have a disability or AD&D rider in your contract.

Both types will cover a specific type of loss. However, one can not replace the other and it’s a good idea to have both types of insurance if you are worried about having comprehensive cover.

Life Insurance Eligibility for Disabled Individuals

Depending on the disability, a person might be eligible for most life insurance policies that are available. Life insurance companies look at a range of factors when they calculate life expectancy and consider applications for life coverage. 

They will look at the type of disability a person has and the severity of the disability before deciding. However, the two most important things an insurance company will consider with any application are age and health.

In the majority of cases, if you are disabled, young, and in good health, an insurer will treat your application favorably over a person who isn’t disabled but who is older and in poor health.

Some other important factors that your life insurance company will look at are:

Whether or not you’re a smoker - Tobacco use can significantly reduce life expectancy, and smokers have to pay higher premiums than nonsmokers.

What your driving record looks like - If you have a history of reckless driving or accidents, your risk profile is higher. Life insurance companies will take this into account when they review your application.

Your family medical history - If your family has life-threatening diseases or conditions insurers might not accept your application, or they may charge you higher premiums to get life coverage.

Your gender - While this may seem a bit strange, men have a higher risk profile than women. Life insurance companies use statistical data to determine risk profiles and life expectancy, which means that men often pay higher premiums than women.

Your lifestyle - A person who has risky hobbies or does dangerous work will have a higher risk profile. This might cause an insurer to reject an application or charge a higher rate for coverage.

A man happy because he will be able to get Life Insurance even with his disability.

Source: Pexels

What Is Underwriting?

Before a person qualifies for certain types of life cover, life insurance companies determine their overall risk profile and life expectancy.

Applicants have to undergo a process called underwriting, which includes a medical questionnaire, a medical exam, and a lifestyle examination.

A life insurance company will use this process to determine if a person is a good candidate for life cover and how much they will have to pay to get insurance.

If you have a disability and would like to get life cover, keep in mind that life insurance companies will look at various factors to determine your risk profile.

For example, a person with a disability who leads an active lifestyle, eats well, and has excellent overall health will be a good candidate for life insurance.

However, a person (disabled or not) that leads an unhealthy lifestyle and has high-risk conditions will be a poor candidate for life coverage.

Which Conditions Can Affect Life Insurance Eligibility?

Certain conditions, diseases, and illnesses are considered high risk and may affect eligibility or life insurance costs. While health insurance companies are prevented from discriminating based on health status or medical conditions, life insurance companies are not. 

They will usually charge people more money for coverage or reject their application if they have a condition that is viewed as high risk.

Here are a few examples of conditions that a life insurance company will associate with higher risks of early mortality: 

  • High blood pressure

  • Heart diseases

  • Cerebral palsy

  • Cancer

  • Mental illness

  • HIV

  • High cholesterol

If you suffer from a condition that is rare or understudied, an insurance company may be cautious about offering you life insurance.

Along with this, the insurance company will look into your family medical history and see if there are genetic conditions that might affect your life expectancy. 

While this will not exclude you from life insurance coverage, it’s important to be aware of these factors as it might complicate the process of getting life insurance.

Some examples of family medical conditions that insurance companies watch out for include:

  • Specific types of cancers, such as breast or prostate cancer.

  • Huntington’s disease

  • Muscular dystrophy

  • Depression

  • Coronary heart disease

It’s important to note that if you do not disclose a health condition or disability when you apply for life cover, your insurer will not pay out a death benefit and the contract will become invalidated.

You must be open and honest with an insurer when applying for a policy. If you think you won’t qualify for term or permanent life cover, there are plans that you can look at.

Some examples include guaranteed-issue life cover and final expense life insurance, which have simpler application processes and sometimes don’t require medical exams.

What Are My Life Insurance Options?

If you are living with a disability and want to get life insurance, there are several options you can look at. Let’s go over the different life insurance plans available.

When most people think of life insurance, they picture permanent or term life cover. Both offer a death benefit and policyholders must pay premiums for the contract to remain valid. 

However, there are a few distinctions that you’ll need to know.

Term Life Insurance

Term life insurance policies have a fixed period of validity. You can buy a term life plan for 10, 20, 25, and 30 years and once this period is over, the life insurance policy ends.

There are different types of term life insurance. These include plans that:

  • Cover a specific type of debt (for instance, mortgage term life cover).

  • Offer premiums back once the coverage period ends (for example, return of premium term life insurance).

  • Provide coverage for smaller amounts of money, such as guaranteed issue life insurance.

  • Will pay for medical bills and funeral costs when you die (for instance, final expense insurance or burial insurance).

  • Decrease over time (for example, depreciating term life insurance).

These plans are more affordable than permanent life cover and provide policyholders with insurance that can be changed or adjusted as they age.

A woman in a wheelchair who is signing up for Term Life Insurance.

Source: Pexels

Permanent Life Insurance

The other type of life insurance is permanent life cover. These plans have no expiration date and remain in force for a policyholder’s entire life.

There are two main categories of permanent life plans: whole life insurance and universal life insurance.

Along with a death benefit, permanent life plans usually have a living benefit (such as a savings or investment component) which people can use to borrow money, or as emergency funds. 

However, these plans are usually more expensive than term and other types of life insurance.

Whole Life vs. Universal Life

Whole life insurance policies are an older type of permanent life cover with fixed returns. They don’t 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 you’d like to learn more about these different types of permanent life cover, check out our article here.

Other Types of Life Insurance Plans

If you’re uncertain about whether you’ll qualify for a term or permanent life plan, there are a couple of other options that disabled individuals can look at. Here are some of the best options for people with disabilities. 

Final Expense Insurance

These insurance plans will pay for any expenses or debts you have after you die. Final expense plans are popular because they have simple application processes, affordable premiums, and don’t require medical exams or in-depth underwriting.

You can use final expense insurance to pay for medical bills, funeral costs, settle debts, pay taxes or cover estate transfer costs for your dependents. This type of coverage is ideal for a person who wants to get their affairs in order. 

Burial or Funeral Insurance

This type of insurance is similar to final expense insurance. However, the policy’s death benefit is used to pay exclusively for funeral or burial costs. In some cases beneficiaries may receive the policy’s cash value, which they can use to pay for funeral expenses.

AD&D Insurance

Accidental death and dismemberment insurance is a form of long-term insurance but shouldn’t be confused with life insurance. An AD&D policy has restrictive coverage terms and will only payout if a policyholder is injured or dies in specific circumstances.

Disability Insurance

As we’ve covered already, these policies will pay out a benefit amount if people become disabled and cannot work or generate income because of a disability. It’s important to remember that, like AD&D insurance, disability insurance is a type of supplemental life insurance and does not replace basic life cover.

Supplemental vs. Basic Life Insurance

Supplemental life coverage gives additional insurance for specific events and circumstances. These types of plans offer protection from life-changing events such as dread diseases, disabilities, and accidental injury.

For example, disability insurance and AD&D insurance are supplemental life insurance plans.

Basic Life Insurance is a comprehensive life insurance policy that protects a policyholder’s beneficiaries in the event of their death. These plans usually won’t have coverage for life-changing events unless specified in the contract.

For example, final expense life insurance and permanent life cover are basic life insurance plans.

A woman reviewing which insurance plan is best for her

Source: Pexels

How to Get Life Insurance with a Disability

If you have a disability, choosing a life insurance policy can be confusing. Here are some tips to help you find the right coverage:

1) Think about what you’d like to get coverage for and calculate how much life insurance you’ll need.

Determine all of your afterlife costs that you’d like to cover with your life insurance. Figure out what your budget is for premiums, get an idea of the minimum amount of coverage you’ll need, and determine which policies you can afford.

2) Look at the different policies out there and decide which one will suit you best. 

Make sure you understand the different coverage options and insurance terms.

Ask yourself:

  • Are you looking for permanent, term or another form of life cover? 

  • Do you want insurance that will cover your expenses when you die? 

  • Do you need security for an asset that you’re paying off?

  • Can you potentially pay for life cover using your disability benefits?

A senior couple signing up for Life Insurance.

Source: Pexels

3) Ask questions and do your research. 

Reach out to an insurance agent or phone around and find out what options insurers in your area have for people with disabilities. Be upfront with your agent or insurer about any disabilities.

4) Always compare your options before signing a contract.

Look at premiums, coverage, and benefits that different life insurance companies offer and read t online reviews of companies you’re interested in. See if your contract also offers additional living benefits such as disability benefits, a cash value component, or AD&D cover.

A woman reviewing which insurance plan is best for her.

Source: Pexels

5) If your preferred life cover options are too expensive, consider other types of life insurance.

There are other types of life insurance, such as final expense or guaranteed issue life insurance, which can offer you adequate coverage. Ask your agent about these options before committing to a term or permanent life plan.

6) If your application isn’t accepted, look into why this happened. 

In many cases insurers won’t insure a person who leads an unhealthy lifestyle, so consider making changes to improve your overall risk profile.

If you need one-on-one assistance with finding providers, learning about your coverage options, or comparing plans, speak to our consultants to help you through the process. 

A woman who is smiling because she qualifies for Life Insurance even with a disability.

Source: Pexels

Where Can I Learn More about Life Insurance?

If you’re interested in learning more about life insurance and getting covered, visit our Life Insurance Hub to find out about term, whole, universal, and other types of life cover.

We also have articles on specific topics such as AD&D cover, reviews of life insurance companies, advice on how to get life insurance, and what you should consider when choosing a plan.

Our team of insurance agents can answer your questions and put you in touch with providers in your state. Call us on 1-888-912-2132 or send an email to help@policyscout.com to speak with someone today.