Having adequate life insurance is an important way to protect your family's financial well-being. Having a disability doesn't necessarily preclude you from getting personal life insurance unless your condition is likely to reduce your life expectancy. Even then, you may just be asked to pay an additional premium, just as smokers or people with high blood pressure do. Every company has its own underwriting guidelines, so even if you are rejected by one insurer, you might be able to get life insurance from another.
Personal Life Insurance Policies
Underwriters have only one concern when determining your eligibility for personal life insurance and what your premiums will be: your life expectancy. This is determined solely on statistical probabilities based on others with similar health issues. For example, partial paralysis due to an accident may have no bearing on life expectancy. In other cases, it isn't the disability itself that makes getting insurance difficult, but the underlying health condition causing it, like heart disease or cancer. If you are upfront with an agent or broker about your health history, he can help you determine what coverage you are eligible for and what the cost may be.
Some group health insurance policies include life insurance. If you begin working for a large company, you may be eligible for some type of life insurance without being asked about your medical history. However, in most states, if you work for a small business with less than 50 employees, you may be asked to submit your medical history before being covered or declined for coverage. If you are leaving a job that has group life insurance coverage, you may be able to bring your coverage with you, provided you begin paying premiums yourself.
No-Medical Life Insurance
Many insurance companies offer small insurance policies, usually limited to $25,000 or $50,000, without asking you to submit to a medical exam. Because the insurer takes on more risk with these policies, premiums are substantially higher. Some policies require that you answer medical questions. These are typically more affordable than other types of policies. As with any life insurance application, it's vital that you read the fine print and answer the questions honestly. Incorrect information on the application will make the policy void in the event of your death.
Even with a severe disability, you may be eligible for life insurance offered by your bank, credit union or other financial institution that will pay off your debts in the event of your death. Veterans and their families are also eligible for life insurance through the U.S. Department of Veteran Affairs. If you belong to any professional organizations, you may be able to get group life insurance benefits there as well. One other option is accidental death insurance. Death by accident is relatively rare, so policies are usually affordable and can give you some peace of mind, particularly if you travel a lot for business.
- Insurance.com: Pre-Existing Conditions Not Always an Obstacle to Good Insurance Rates
- Life Insurance Underwriting: Life Insurance Underwriting Guide
- NAHU: Consumer Guide to Group Health Insurance
- Financial Web: Is Guaranteed Issue Life Insurance Your Final Choice?
- Indiana University: Life Insurance Plan Highlights
- American Institute of CPAs: Member Insurance Programs
- Health.com: How to Keep Your Insurance Benefits When You Quit or Get Fired From Your Job
A published author and professional speaker, David Weedmark has advised businesses and governments on technology, media and marketing for more than 20 years. He has taught computer science at Algonquin College, has started three successful businesses, and has written hundreds of articles for newspapers and magazines throughout Canada and the United States.