Buying Life Insurance for People With Disabilities

According to the Centers for Disease Control and Prevention, nearly 29% of U.S. adults live with a disability, highlighting the need to secure life insurance to ensure their family's financial stability. Despite potential higher costs and limited policy choices, obtaining life insurance is still feasible for individuals with disabilities. A policy can supplement your income or disability benefits, providing your family with essential financial support.

Generally, adults with disabilities have the same choices for life insurance as other consumers, although high-risk medical conditions can limit options. Understanding these considerations and working with a qualified professional can help you find the proper financial protection.

Individuals with disabilities can still qualify for life insurance. Disabilities — whether developmental, physical or otherwise — do not automatically prevent you from obtaining coverage. Obtaining life insurance for adults with disabilities is the same as for anyone else. Your application will be evaluated based on age, gender, medical history and hobbies. Disability is just one part of the equation.

Adults with disabilities generally have the same choices as other adults, but the nature of your disability may influence your policy options. If your disability doesn't affect your life expectancy and you are otherwise healthy, you can likely qualify for life insurance easily. However, disabilities that have lasting effects on your health may limit your options and impact your premium. For example, you may have a more challenging time getting insured if your physical disability creates a high-risk medical condition.

If that's the case, you might consider nontraditional life insurance options such as guaranteed acceptance or survivorship life insurance. These options generally have fewer health requirements but may come with higher premiums due to the increased risk perceived by insurers.

Adults with disabilities can either buy life insurance themselves or have someone assist with the purchase. Remember that the type of life insurance coverage that is right for you depends on your coverage needs, policy goals and budget.

Adults with disabilities have several life insurance options available, ranging from term life insurance to permanent life insurance. Each policy type has pros and cons; the best choice depends on your specific disability and financial needs. When shopping for life insurance with a disability, consider the additional financial responsibilities you may need to cover, such as dependents or outstanding debts.

Term life insurance is popular for those needing substantial coverage to address significant financial responsibilities, such as a mortgage or providing for dependents. This type of insurance offers flexibility, as you only pay for it as long as you need it, and you can cancel the policy if your financial obligations change, such as after paying off debt or when your children no longer rely on you financially.

For individuals with disabilities, term life insurance can be particularly helpful in providing financial security for dependents. The death benefit can cover essential expenses like mortgage payments or college tuition, ensuring your loved ones are supported if you pass away during the policy term. The main advantage of term life insurance is its lower cost. However, it does not accumulate cash value, and coverage ends when the term expires.

Permanent life insurance includes options like whole life and universal life insurance. These policies offer lifelong coverage and accumulate cash value over time, which can be used as an investment vehicle. While more expensive than term life insurance, permanent life insurance provides continuous coverage and potential financial growth. However, the higher premiums can be a drawback. Here are some common permanent life insurance options:

There are some life insurance riders you can add to your policy, such as accelerated death benefit and term conversion riders, depending on the policy conditions. You can often add these types of riders without concern for your current health.

Parents can secure life insurance for their children with disabilities through various options, such as a child rider on their policies or a separate life insurance policy specifically for the child. Purchasing life insurance for a child with disabilities ensures they have lifetime coverage, even if their condition deteriorates over time. Securing coverage while your child is young can help lock in more affordable rates, saving money on premiums in the long run.

Adding a child rider to your own life insurance policy can provide a death benefit if your child dies before a certain age. While this may not be sufficient for extensive medical bills or income replacement, it can help cover funeral expenses and other immediate costs. Some child riders can be converted into permanent life insurance policies upon adulthood. The specific terms and costs will vary based on the rider's conditions, the child's health and other factors.

Purchasing a separate life insurance policy for your child is another option. If your child's health is likely to worsen with age, it may be wise to consider purchasing life insurance. Some insurers offer life insurance policies for children, usually with smaller coverage limits than adult policies.

Veterans with disabilities have government-sponsored programs, such as VALife, previously called the Service-Disabled Veterans Life Insurance (S-DVI) program, which can either supplement or replace the need for private insurance. Veterans Affairs Life Insurance (VALife) provides guaranteed acceptance for whole life coverage in $10,000 increments, up to a maximum of $40,000. Veterans with service-related disabilities are automatically eligible, ensuring access to life insurance regardless of health conditions. The coverage becomes effective two years after enrollment.

Eligibility for VALife is open to all veterans aged 80 and younger with a VA disability rating. Veterans aged 81 or older who applied for a disability rating before their 81st birthday but received the rating afterward can apply within two years of receiving their rating. Beneficiaries receive the premiums paid plus interest if the veteran passes away during the waiting period. Veterans with S-DVI coverage have the option to stay in the program or apply for VALife. Those applying for VALife before December 31, 2025, can retain their S-DVI coverage during the initial two-year waiting period for VALife.

When applying for life insurance, you'll need to provide detailed information about your health and medical history. This includes answering health-related questions during an initial interview, undergoing a medical exam and possibly providing medical records. Be accurate and truthful in your application to avoid claim denials.

If you're denied traditional life insurance, seek an explanation to determine if there are aspects you can improve for future applications. Fortunately, several alternative options can still provide valuable protection, like guaranteed acceptance life insurance, group life insurance, final expense insurance and joint survivorship life insurance. Work with an experienced life insurance agent to help you explore various alternative options and find the best fit for your needs.

Guaranteed acceptance life insurance offers coverage without requiring a medical exam or answering health questions. This makes it an excellent option for individuals with disqualifying health issues. However, coverage limits are typically lower, ranging from $5,000 to $25,000. Additionally, these policies often come with graded death benefits, meaning the full death benefit is only paid out if you pass away after the initial two or three years of coverage, except in the case of accidental death. Guaranteed acceptance life insurance is primarily designed to cover end-of-life expenses like funerals or medical bills.

Many employers offer group or supplemental life insurance plans that provide affordable coverage to employees without requiring a medical exam. These plans typically cover an amount equal to one year of salary. Some group policies may include additional benefits, such as a premium waiver for employees who become disabled. While group life insurance might offer less coverage than needed and may not be portable if you leave your job, it can be a viable option if traditional life insurance is unattainable due to a disability.

Final expense insurance policies are designed to cover final expenses like funeral costs. These policies generally do not require a medical exam, and the application process may involve minimal or no health questions. This type of insurance ensures that your beneficiaries have the funds to cover your final expenses without financial strain.

Survivorship life insurance, or second-to-die insurance, covers two people under one policy and pays the death benefit only after both policyholders have passed away. Unlike joint life insurance, which pays out after the first death, survivorship life insurance ensures that the benefit is preserved for beneficiaries, making it a better option for long-term planning.

This is particularly beneficial for individuals with disabilities, as it guarantees that the death benefit will be available even if the disabled spouse’s health has worsened and the healthier spouse passes away first, providing necessary financial support to the beneficiary without the risk of losing coverage. In contrast, joint life insurance may not be ideal for someone with a disability, as they would then have to qualify for a new policy if the joint policy pays out upon the first death.

Here are answers to some common questions to help guide you through the process of getting a life insurance policy with a disability:

We've curated a list of resources that can provide valuable assistance and guidance in managing finances and ensuring financial security for individuals with disabilities.

• ABLE National Resource Center: The ABLE NRC provides information about ABLE accounts, which allow individuals with disabilities to save and invest money without affecting their eligibility for certain public benefits.
• American Rescue Institute (ARI): ARI provides a range of services for individuals with disabilities, including advocacy, legal support and access to resources.
• ADA Disability Rights Guide: This guide offers comprehensive information on disability rights under the ADA, including legal protections and accommodations.
• Centers for Medicare and Medicaid Services (CMS): CMS provides information on Medicaid and Medicare programs, which can be crucial for individuals with disabilities in managing their health care and financial needs.
• Disability Resources: An extensive directory of disability-related resources, including financial assistance, health care and legal support.
• Disability Rights: An organization dedicated to advocating for the rights of individuals with disabilities, offering legal resources and support.
• National Disability Institute (NDI): NDI offers financial education, coaching and resources to help individuals with disabilities achieve financial independence and stability.
• Social Security Administration (SSA): The SSA provides information and support for individuals with disabilities, including details on Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
• The Arc: The Arc supports individuals with intellectual and developmental disabilities, offering resources for financial planning, benefits and legal assistance.
• U.S. Department of Veterans Affairs (VA): The VA offers various life insurance programs for veterans with disabilities, including VALife and S-DVI, as well as other benefits and resources.
• U.S. Department of Health and Human Services (HHS) Programs for People With Disabilities: This page provides information on various social services programs for individuals with disabilities, including resources related to health, employment and financial support.
• U.S. Department of Labor (DOL) Disability Resources: The DOL offers resources and information on employment rights, accommodations and other work-related issues for people with disabilities.
• USA.gov Benefit Finder: A tool to help individuals with disabilities find federal benefits and programs that can assist with financial and health care needs.
• USA.gov Disability Services: This page provides a guide to federal disability services, including benefits, health care and legal rights.