How Can I Get Life Insurance When I'm on Disability?

Your doctor can testify your disability isn't life-threatening.
Your doctor can testify your disability isn't life-threatening. (Image: Jupiterimages/ Images)

People in good health typically do not have problems qualifying for at least basic life insurance, although some pay more in premiums due to the way the insurance company has categorized them. When you are on disability, you still should be able to find a company to provide you with a life insurance policy, although you may have to do a little more shopping.

Demonstration of Life Expectancy

Life insurance companies are not concerned so much with the fact you have a disability as they are with the fact the disability will contribute to your demise. You may have a condition that qualifies you for disability benefits but which does not decrease your life expectancy. Blindness is a perfect example, as many blind people are otherwise in perfect health. Ask your doctor to give you a comprehensive physical examination and testify in writing that they do not foresee your disability shortening your life and that, although you may not be able to work, you still can complete basic life tasks. You also can get your doctor to testify similarly if your disability is not expected to be permanent.

Stop Risky Behaviors

Life insurance companies view risky behaviors like smoking negatively. Stopping those kinds of behaviors while on disability may help you qualify with more companies or get into a better category with lower premiums. Lower premiums are important for those on disability, as disability payments typically are low enough to force tight budgeting.

Look for a Simplified or Guaranteed Policy

If you can't get a regular insurance policy while on disability — this may be the case for more severe disabilities — consider a simplified or guaranteed life insurance policy. Neither simplified or guaranteed life insurance necessarily require a physical exam. For simplified policies, insurance companies ask only basic health questions, like if you have a terminal disease or are in a nursing home. For a guaranteed policy, the insurance company doesn't ask any questions, but they may not pay the face value of the policy right away after you die. Instead, they'll pay out gradually over a set period of a time — for example, five years — until the premiums, interest and face value of the policy are eliminated. These kinds of policies are readily available online.

If you do purchase insurance online, be wary of scams. Some companies purposely prey on those who have trouble finding insurance coverage elsewhere. To ensure your company is legitimate, check its rating with the Federal Trade Commission, Better Business Bureau, your local Chamber of Commerce and similar agencies. You also should check independent sites or talk to members of your community to see what experiences they have had with the companies you are considering.

"Disabled" Definition and Underwriting

All insurance companies use underwriting. This is the process of looking at all aspects of people's lives to determine how much of a risk they pose to the company — people are categorized by life insurance companies through the underwriting guidelines. The problem with underwriting is that each company may use a different definition for exactly what constitutes a disability. If you are on disability, do not assume that the insurance company of your choice considers you disabled. Before you apply for an insurance policy, ask to see a copy of the insurance company's underwriting guidelines relating to the definition of disability. This way, you can avoid applying at the companies most likely to deny you and, if necessary, challenge a denial.

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