If you’re disabled you must be wondering if you can get life insurance. Well, it all depends on why you are disabled. When it comes to disability it can be from a mental condition, a physical injury or due to an illness. It is a little harder to get covered with a disability than someone who is a typical applicant but not impossible. The key is applying with the right company!
Quick Summary:
- Disability alone is not the reason you’d have a hard time getting life insurance but rather the illness or injury behind it.
- If you have a major medical condition, you being on a disability shows the carrier that your condition is quite serious.
- Getting better odds of approval comes down to working with a high risk carrier.
- If you’re disabled anything else like a smoking habit, bad driving record or other medical conditions will make it more difficult to apply.
- Veteran Disability is viewed a bit differently by insurance companies compared to SSDI.
- If you have been turned down by multiple life insurance companies then you still have another option, which is a guaranteed issue policy.
- Guaranteed issue plans are capped at $25,000 and cover you for a whole life. They can also be stacked together for more coverage.
- Best thing to do is just work with an independent agency that specializes in high risk cases. (Hint: That’s Us)
How does Disability affect my Life Insurance?
The disability is not what stops people from getting approved for life insurance. What does, however, is the reason they are disabled. For instance, someone with a lower back injury who is in fair health can get approved much easier. On the other hand, if you are disabled due to a mental disorder like Bipolar or physical ailment like Crohn’s disease it will be harder to get approved. It will come down to the severity of your condition and other factors. So, in essence, the company will be looking at your health impairment as a primary focus. The disability does show the carrier that your condition is somewhat serious since it caused a change in your lifestyle.
Some of the factors that reduce the chances of getting approved might be a smoking habit, drug/alcohol abuse, bad compliance with treatment and other medical conditions. If you are on disability with a medical condition, smoking is like an icing on the cake to get high rates or a decline. For someone who is disabled due to OCD, severe depression, schizophrenia or any other mental disorder to have substance abuse will also increase the chance of getting declined. Bad compliance with treatment will usually show the carrier that your condition is uncontrolled, in this case, you are uninsurable until you get things under control. If you have more than one medical condition on top of the one you are disabled for it will also lead to higher rates or getting declined.
Okay enough about declines, let’s talk about getting approvals!!! To increase the chance of getting approved, please work with a broker who specializes in high-risk cases. Also, make sure that the broker works with all the top rated companies since all the companies welcome different types of risk. It helps too if you get declined since there are backup options. Picking the right company is crucial to getting approved with lower premiums. If you have some healthy lifestyle habits it is a good idea to have your agent draft a cover letter, so the company can get an additional reason why you are a good candidate. This is something we do with most of our cases.
One of the best factors that life insurance companies seek is whether or not you’re employed either part time or full time. When someone is working it’s a sign that they don’t really let the condition stop them from living their lives. In our experience people who do some kind of work tend to get approved more likely than the ones who don’t. Even if you’re self-employed and only work part time that is still better than being unemployed. The key here is to show the carrier that the condition didn’t stop you from doing daily functions.
VA Disability
If you’re a disabled veteran but don’t collect SSDI then you have much better shot at getting approved for life insurance. With our past veteran clients, we noticed that they will collect VA disability benefits but still have a job or a business. Often times they can expect to pay similar rates as the people who are not on disability at all. Of course, we always recommend shopping around with multiple carriers and doing additional steps like a cover letter to increase your odds of getting the most competitive rate.
Last Resort (Guaranteed Issue Coverage)
If you have tried to apply for life insurance with high-risk carriers like TransAmerica, Prudential, and AIG with no luck! Then it may be time to go for a guaranteed issue policy that doesn’t ask any questions with guaranteed acceptance. This is usually a whole life policy that offers up to $25,000 of life insurance coverage until age 100 with a two-year waiting period. In other words, if anything happens to you in the first two years your family would only get the premiums paid plus like 10% interest.
In the end, it all comes down to applying with the right company, reason for disability and severity of that reason. If you get declined with the traditional carrier don’t worry there is still another way which is Guaranteed Issue coverage. This is a type of a policy that will issue coverage with no exam and no questions asked, hence the name. It will have a provision where the company will only return the payments you made if something happens to you. After two years it’s a full payout in the event of death. If you are interested in protecting your loved ones we will find an option for you. Don’t hesitate to reach out for a custom no gimmicks or obligation quote. Call us today at 888-492-1967.
