Many people automatically assume that there is no life insurance for disabled people.
They believe that once someone becomes disabled, or if they have been disabled since birth, their ability to purchase life insurance is gone forever. Fortunately, for most of the disabled people in the United States, that is not true.
The Americans with Disabilities Act has made it illegal for an insurance company to refuse coverage to anyone based solely on a disability. A provider may, however, charge a higher premium to a disabled person if the underwriters believe that the disability will adversely affect his lifespan.
Things that affect coverage
Disabilities are not all alike. Some were caused by birth defects, some by illness. Others may have been caused by accident or injury. Some disabilities are debilitating. Others may have little effect on the individual’s life except for some minor inconveniences. For those with a disability that is associated with complications in later life, or early death, it will be more difficult, and more expensive, to obtain a life insurance policy than for those whose disability has no such correlation.
Life insurance companies assess each application on an individual basis. They take into consideration the extent of the disability and the likelihood that it will have an effect on the lifespan of that individual.
The overall health of the applicant has the greatest influence on the insurance coverage available to him. For example, a person who has lost a limb, but is in good health otherwise, will be able to obtain a life insurance policy more easily than a person who is severely limited in function and abilities. A thorough examination will be required to ascertain the level of disability and the impact it is predicted to have on the lifespan. A person who is able to live a predominantly normal life may be able to get coverage at standard prices. Premium prices will rise in direct proportion to the extent of the disability.
If the disabled person is employed, it may be possible for him to obtain life insurance through a group plan offered by his employer. Typically, when insuring a group of people, providers do not ask individual questions about health or disabilities. If the questions are not asked prior to the policy being issued, a person cannot be rejected for pre-existing conditions or disabilities later.
Group plans may also be available through clubs or associations. Group plans are not usually portable. If a person leaves the employer, or drops his membership in the group, the coverage may be discontinued. If this happens, the insured may be offered the opportunity to purchase a continuing coverage policy. This type of policy is more expensive than a group policy.
A company may issue the disabled person a life insurance policy with limitations or exclusions. The presence of a pre-existing conditions clause in the policy will cause it to become void and noncollectable if the insured dies from the disability. Choosing this option is another way to get a policy at standard rates.
There are certain conditions that will prevent a disabled person from receiving insurance coverage. However, no one should automatically assume that he falls into that category. Before giving up, check out the possibilities and request life insurance quotes for disabled people.