Nowadays, it’s common knowledge how important life insurance can be for those with dependents who rely on their income. However, what is often overlooked is someone who may not be dependent on your income but who will be inconvenienced or put in a difficult position if you were to pass away.
Instead of leaving your loved ones with no life insurance, finding a small simplified issue whole life insurance policy to cover your final expenses and burial costs can greatly ease their burden.
A common question that arises with this topic is, “What if I am on Social Security disability?” If you are receiving disability or any kind of Social Security allowance, the process of getting covered does become a bit more difficult. But in this article, we will discuss your options and how to navigate the barriers to entry, as well as find the best prices.
Types of Disabilities that Insurance Companies Screen For.
There are many different types of disabilities that can affect individuals in different ways. Here are some common types of disabilities:
- Physical disabilities: Physical disabilities affect an individual’s mobility or physical abilities. Examples include amputations, spinal cord injuries, cerebral palsy, and muscular dystrophy.
- Sensory disabilities: Sensory disabilities affect an individual’s senses, such as hearing or vision. Examples include deafness, blindness, and hearing loss.
- Intellectual disabilities: Intellectual disabilities affect an individual’s cognitive abilities, such as learning, reasoning, and problem-solving. Examples include Down syndrome and autism spectrum disorder.
- Mental health disabilities: Mental health disabilities affect an individual’s emotional and mental well-being. Examples include depression, anxiety disorders, bipolar disorder, and schizophrenia.
- Developmental disabilities: Developmental disabilities affect an individual’s development, such as their ability to communicate or learn. Examples include dyslexia, attention deficit hyperactivity disorder (ADHD), and speech and language disorders.
- Chronic health conditions: Chronic health conditions affect an individual’s physical health over a long period of time. Examples include diabetes, multiple sclerosis, and Crohn’s disease.
It’s important to note that disabilities can vary in severity and can affect individuals differently. Some disabilities may be visible, while others may be invisible. It’s also important to recognize that individuals with disabilities may have different needs and require different types of support to live their lives to the fullest.
Common Disability Benefit Programs Insurance Companies will ask about
There are several common disability benefit programs available to individuals with disabilities. These programs are designed to provide financial assistance and support to individuals who are unable to work due to a disability. Here are some of the most common disability benefit programs:
- Social Security Disability Insurance (SSDI): SSDI is a federal program that provides disability benefits to individuals who have worked and paid Social Security taxes. To be eligible for SSDI, an individual must have a qualifying disability that is expected to last for at least 12 months or result in death.
- Supplemental Security Income (SSI): SSI is a federal program that provides financial assistance to individuals who are aged, blind, or disabled and have limited income and resources. To be eligible for SSI, an individual must have a qualifying disability and meet certain income and asset requirements.
- Workers’ Compensation: Workers’ compensation is a state-run program that provides benefits to individuals who are injured or become ill as a result of their job. Benefits may include medical treatment, wage replacement, and disability benefits.
- Veterans’ Disability Benefits: Veterans’ disability benefits are available to individuals who have served in the military and have a service-related disability. Benefits may include disability compensation, health care, and vocational rehabilitation services.
- State Disability Insurance: State disability insurance is a program available in some states that provides short-term disability benefits to individuals who are unable to work due to a non-work-related illness or injury.
- Long-term Disability Insurance: Long-term disability insurance is a type of insurance that provides income replacement if an individual becomes disabled and is unable to work for an extended period of time.
It’s important to note that eligibility requirements and benefit amounts for these programs may vary depending on the specific program and individual circumstances.
How Life Insurance Companies View Applicants Receiving Disabiltiy Benefits
eceiving disability benefits can affect your ability to qualify for a traditional life insurance policy, as it indicates that you have a medical condition that may make you a higher risk to insure. However, not all life insurance companies have the same underwriting guidelines, and some may be more willing to insure individuals with disabilities or who are receiving disability benefits.
When applying for life insurance with a disability, it’s important to disclose your disability and any related medical conditions to the insurance company. The insurance company will typically ask for information about your medical history, including any diagnoses, treatments, and medications you are taking. They may also request medical records or ask you to undergo a medical exam.
The insurance company will use this information to assess your risk and determine whether they are willing to offer you coverage. Depending on the severity of your disability and any related medical conditions, the insurance company may offer you a policy with certain exclusions or limitations, or they may offer you coverage at a higher premium rate.
In some cases, individuals with disabilities may be able to qualify for traditinal life insurance policies however when possible it will usually be at a higher premium than those not currently receiving disability benefits.
Overall, it’s important to work with a knowledgeable insurance agent who can help you navigate the life insurance application process and find the best policy for your individual needs and circumstances.
Factors to Consider when applying for life insurance on disabilty
When applying for life insurance on disability, there are several factors to consider. Here are some key ones:
- Type of disability: Life insurance companies may view different types of disabilities differently when it comes to underwriting policies. For example, some may be more lenient towards disabilities that don’t pose a significant risk to life expectancy, while others may be more cautious. Make sure you understand how your specific disability may impact your ability to get coverage and what factors the insurance company will consider.
- Severity of disability: The severity of your disability will also play a role in the underwriting process. Insurance companies will want to know the extent to which your disability affects your ability to work and carry out daily activities.
- Age: Your age can also impact your ability to get life insurance on disability. Generally, the younger you are when you apply, the easier it may be to get coverage.
- Premiums: As mentioned earlier, premiums for life insurance on disability may be higher than those for individuals without disabilities. This is because insurance companies see individuals with disabilities as higher risk. Be prepared to pay more for coverage, and make sure you understand the costs and how they will impact your budget.
- Policy type: There are different types of life insurance policies to consider, such as term life, whole life, or universal life insurance. Some policies may be more appropriate for individuals with disabilities than others, depending on your specific needs and circumstances.
- Underwriting process: The underwriting process for life insurance on disability may be more rigorous and require more documentation than for individuals without disabilities. Be prepared to provide medical records and other documentation to support your application.
- Insurance company: Not all insurance companies are the same when it comes to underwriting policies for individuals with disabilities. Shop around and compare policies and rates from different providers to find the one that best meets your needs.
It’s important to take the time to understand these factors and consider them carefully when applying for life insurance on disability. A knowledgeable insurance agent can help you navigate the process and find the best policy for your needs.
Finding Life Insurance while receiving Disability Benefits
Finding life insurance while receiving disability benefits can be challenging, but it’s not impossible. It will depend on the specific details of your disability and the insurance company’s policies.
Here are some things to keep in mind:
- Disclose your disability: Be honest with the insurance company about your disability and any related health conditions. Failing to disclose this information can result in your claim being denied later on.
- Shop around: Not all insurance companies have the same underwriting guidelines. Some may be more willing to insure individuals with disabilities than others, so it’s important to compare rates and policies from different providers.
- Consider guaranteed issue policies: Some insurance companies offer guaranteed issue policies, which means you can’t be turned down for coverage regardless of your health or disability status. These policies tend to be more expensive and may have lower coverage limits, but they can be a good option if you’re having difficulty finding coverage elsewhere.
- Work with an experienced agent: A knowledgeable insurance agent can help you navigate the application process and find the best policy for your needs. Look for an agent who has experience working with clients who have disabilities.
- Be prepared to pay more: If you’re able to obtain coverage, your premiums may be higher than someone without a disability. This is because insurance companies see individuals with disabilities as higher risk.
Remember, while it may be more challenging to obtain life insurance while receiving disability benefits, it’s important to have coverage in place to protect your loved ones in the event of your passing.
For Those Unable to Qualify for Traditional Coverage
If you are unable to qualify for traditional life insurance coverage due to a disability or other health condition, there are still some options available to you. Here are a few:
Guaranteed issue life insurance:
This type of life insurance policy does not require a medical exam or health questions, so it can be a good option for individuals who have been declined for traditional coverage. Guaranteed issue policies usually have lower coverage amounts and higher premiums, and may also have a waiting period before the death benefit becomes available.
- No medical exam or health questions: With guaranteed issue life insurance, you don’t have to worry about a medical exam or disclosing any health conditions. This can be a relief for individuals who have been declined for coverage in the past due to a pre-existing condition.
- Guaranteed acceptance: As long as you meet the age requirements and live in a state where the policy is offered, you are guaranteed acceptance for the coverage. There are no health or lifestyle factors that can disqualify you from coverage.
- Higher premiums: Guaranteed issue life insurance policies typically have higher premiums than traditional policies, since the insurance company is taking on more risk by offering coverage to individuals without knowing their health status.
- Lower coverage amounts: Guaranteed issue policies may have lower coverage amounts than traditional policies, which means that the death benefit may not be enough to provide for your loved ones in the event of your death.
- Waiting period: Many guaranteed issue policies have a waiting period before the death benefit becomes available. This can range from two to three years, depending on the policy. If you die during the waiting period, your beneficiaries may only receive a return of premiums paid, rather than the full death benefit.
- Limited benefits: Some guaranteed issue policies may have limited benefits, such as a graded death benefit, which means that the full death benefit is only available after a certain period of time. Others may have a lower accidental death benefit than traditional policies.
Overall, guaranteed issue life insurance can be a good option for individuals who have been declined for traditional coverage, but it’s important to carefully consider the policy terms and limitations before making a decision. Working with an experienced insurance agent can help you find the right coverage for your individual needs and circumstances.
Group life insurance:
Group life insurance is often offered through an employer or other organization, and may have more lenient underwriting requirements than individual policies. However, group life insurance coverage may be limited, and you may lose coverage if you leave the group.
- Convenience: Group life insurance is often easy to obtain because it is offered as part of a benefits package through an employer or other organization. This can save time and effort in the application process, and there may be no need for a medical exam.
- Lower cost: Group life insurance is often less expensive than individual policies, because the premiums are shared among a large group of people. Additionally, some employers may pay for all or part of the premiums.
- Guaranteed acceptance: Group life insurance policies often have less strict underwriting requirements than individual policies. This means that you may be able to obtain coverage even if you have pre-existing health conditions.
- Limited coverage: Group life insurance coverage may be limited, and may not be enough to meet all of your life insurance needs. Additionally, coverage may only be available as long as you remain employed by the organization offering the policy.
- Limited flexibility: Group life insurance policies may not offer the same level of flexibility as individual policies, and you may not be able to customize the coverage to meet your specific needs.
- Portability: If you leave the organization offering the group life insurance policy, you may not be able to take the coverage with you. In some cases, you may be able to convert the group policy to an individual policy, but this can be more expensive and may require additional underwriting.
- Tax implications: Group life insurance premiums paid for by an employer may be subject to taxation, which can increase the cost of coverage.
Overall, group life insurance can be a convenient and cost-effective way to obtain life insurance coverage, but it may not meet all of your individual needs. It’s important to carefully consider the terms of the policy, and to supplement group coverage with additional individual coverage if necessary.
Accidental death insurance:
Accidental death insurance is a type of insurance policy that pays out a death benefit only if the policyholder dies as a result of an accident. Here are some pros and cons to consider:
- Affordable: Accidental death insurance policies tend to be more affordable than traditional life insurance policies, since they only pay out if the policyholder dies as a result of an accident. This can make it an attractive option for individuals who may not be able to afford more comprehensive coverage.
- Easy to obtain: Accidental death insurance policies typically require little or no medical underwriting, so they can be easier to obtain than traditional life insurance policies.
- Supplementary coverage: Accidental death insurance can be a good supplement to a traditional life insurance policy, especially if you work in a high-risk occupation or engage in high-risk activities.
- Limited coverage: Accidental death insurance policies only pay out if the policyholder dies as a result of an accident. If you die from natural causes or illness, your beneficiaries will not receive a death benefit.
- No cash value: Accidental death insurance policies do not build cash value, which means that there is no savings component to the policy.
- Limited benefits: Some accidental death insurance policies may have limited benefits, such as a graded death benefit or a waiting period before the policy becomes effective.
- Limited usefulness: Accidental death insurance may not be a good option for everyone, especially if you are not engaged in high-risk activities or work in a low-risk occupation. In these cases, a traditional life insurance policy may be a better option.
Overall, accidental death insurance can be a good option for individuals who need supplemental coverage or who may not be able to afford more comprehensive life insurance coverage. However, it’s important to carefully consider the policy terms and limitations before making a decision, and to ensure that accidental death insurance is the right type of coverage for your individual needs and circumstances.
Buying life insurance while on disability can be challenging, as traditional life insurance policies often require a medical exam and may have strict underwriting requirements. However, there are still options available, such as guaranteed issue life insurance, group life insurance, and accidental death insurance.
These types of policies may have less stringent underwriting requirements and may be more accessible to individuals on disability. It’s important to carefully consider the policy terms and limitations, as well as the potential costs and benefits, before making a decision.
Additionally, it may be beneficial to work with an experienced insurance agent or financial advisor who can help navigate the process and find the best policy for your individual needs and circumstances.
JustBuryMe is an agency that represents many different companies, offering ordinary, no exam and guaranteed issue life insurance. Give us a call today to see just what is available for you.