A personal disability can make life extremely challenging. While there are many types of disabilities, each comes with its own unique challenges. For disabilities that have a high-correlation with early fatality, purchasing a life insurance policy is a common challenge. In the United States’ free market economy, life insurance can be difficult if not impossible to come by for the seriously disabled, and even if life insurance is procured, it may mean a much higher premium is required.
There are very few group health and life insurance options offered through Medicaid and usually the requirements are fairly high in order to qualify for group life insurance. While the battle rages in the United States regarding whether insurance policies should be offered universally to all citizens (the current debate relates to health care, but life insurance may not be far behind).
All life insurance providers spend time assessing each potential policyholder’s health and other factors that might suggest an early passing. Each insurance provider has a different system, so it is a good idea to look around at different options and apply for coverage with the companies you find best, but for people with pre-existing conditions, finding insurance can be aggravating (and either impossible or prohibitively expensive), as most companies perform a thorough examination before insuring a new client.
Getting affordable life insurance in the United States with or even without a disability can be a challenge. Each life insurance company determines the amount of risk or liability they may take on by covering an individual based on a process called “underwriting.” During the underwriting process, the client’s natural lifespan expectation and a series of other factors including physical condition, health impairments, habits, and risky behaviors or lifestyle choices. For example, bad driving records, pre-existing health conditions, and other risk factors play into the underwriting process.
As one would expect, the decision to insure or not to insure a disabled individual is directly related to the risk that the disability poses a terminal health risk to the individual. If there is no known correlation between the disability and the disabled person’s life expectancy, insurance companies generally ignore the disability and policies are priced as with other non-disabled individuals.
In America, the Americans with Disabilities Act makes it illegal to refuse service to anyone based on disability. If you are an American citizen with a disability and you encounter unfair discrimination or harassment during your search for life insurance coverage, you have the right to report the insurance agency to the government. However, because some disabilities do negatively impact the lifespan of the person with the disability, life insurance providers do have the right to increase premiums or refuse life insurance applications based on the information they collect during the underwriting process.
There are insurance providers that offer insurance policies without requiring a full examination. However, these companies are few and far between and the rates for the policies are usually exorbitant to the point that they may not be worth the benefit. Still, if traditional insurance companies decline coverage, you may want to consider finding a more risk-tolerant insurance provider. Be sure to investigate the provider to make sure that they are capable of meeting their financial obligations; one way to do this is to check with your State’s insurance department, whose role is to monitor insurance companies operating in their jurisdiction and to protect their constituents’ rights.