Life insurance covers the monetary losses associated with death, particularly the lost income of a wage-earner. Insurers base their premiums on the insured person's actuarial life expectancy, which is primarily determined by family medical history and overall health. If you're disabled, expect to go through some hoops to get insured. Each insurer has different policies regarding the insurability of certain conditions, so it may be worthwhile to shop around for coverage.
Rated Whole Life Insurance
Life insurance companies divide their contracts into ratings, which are ranked categories based on the policyholders' relative health. Insurance companies generally term the highest two ratings super preferred and preferred, and lower-ranked policies are deemed rated. For example, non-smokers in good health with no genetic history of major health hazards such as heart disease generally receive the best rating and the lowest rates. From there, the premiums rise as the risk of death in each category rises. While people with purely physical disabilities because of an accident or injury may still be able to obtain one of the highest ratings, people with disease-related disabilities, such as diabetes, may only qualify for rated whole life insurance, where the premiums are much higher. However, once a person receives the policy, as long as she continues to make the premium payments on time, the life insurance coverage will continue, and there will be no need to requalify at a later date.
Term Life Insurance
People with certain disabilities that could contribute to a shorter-than-average life expectancy -- especially those who do not qualify for whole life insurance -- could still qualify for a term life policy of a relatively short duration. Those with potentially life-shortening conditions such as high blood pressure may be able to obtain a term policy at a young age, for example. Term rates are generally less expensive than whole life insurance, since term insurance has no savings component and only provides coverage for a specified number of years. To obtain additional term life insurance after the contract period is up, policyholders must start the underwriting process again and prepare to pay higher premiums.
Survivorship Life Insurance
Survivorship, or second-to-die life insurance policies, insure two lives -- generally spouses. Many people who are otherwise uninsurable can get a survivorship policy because their spouses enjoy good health. However, this type of life insurance cannot be used to pay for the living expenses of the surviving spouse, which is the reason that many people purchase life insurance. Instead, those who purchase survivorship policies often plan for the death benefit to either pay for any estate taxes due upon both spouses' deaths or to provide an inheritance to children or other heirs.
Disabled US Veterans
American veterans with total disabilities resulting from their service in the military may qualify for life insurance coverage through the US Department of Veterans Affairs. Veterans must be in otherwise good health and must apply within two years of receiving notification that the VA has documented their disability as service-related. Policies are available for a maximum $10,000 death benefit.
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