Buying life and disability insurance at the same time

The best way to protect your income is by having both a life insurance and disability insurance policy in place.

Nupur Gambhir


Nupur Gambhir

Nupur Gambhir

Life Insurance Expert

Nupur Gambhir is an insurance editor at Policygenius and licensed Life, Health, and Disability agent in New York.

Updated February 19, 2020|6 min read

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While life insurance protects your loved ones from financial loss after you’ve passed away, disability insurance ensures that you and your family are financially protected while you are still alive. A disability insurance policy provides an income replacement if you can no longer work due to a disability and can be an essential part of your financial protection plan.

If you don’t already have long-term disability insurance — and most people don’t — applying for a policy when you’re shopping for life insurance makes a lot of sense. Like life insurance, long-term disability applications also go through the underwriting process and require a medical exam.

Key Takeaways

  • Life insurance provides an income replacement for the income you provided to your family after you die

  • Disability insurance provides an income replacement if you incur a disability and cannot work

  • If you apply for life insurance and disability insurance at the same time, you can use the lab results from your medical exam for both insurance applications

  • If purchasing a separate disability insurance policy is not feasible, you can add disability riders to your life insurance policy for more robust coverage

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How insurance works

Life insurance and long-term disability insurance are both sources of income protection, though they differ in how they offer coverage. The graph below demonstrates the key components of life and disability insurance.

CriteriaTerm life insuranceLong-term disability insurance
Primary purposeProvides financial protection for your dependents if you dieProvides income protection for you if you become disabled
Benefit periodLump sum if you die while policy is active2, 5, 10 years, or until retirement
Coverage amount$100,000 to $1 million+Up to 60% gross monthly income
Average cost$300-$400 per year1-3% of annual salary

Is life insurance worth it?

Life insurance provides a death benefit to your beneficiaries if you die while the policy is in force and is an essential protection for anyone with dependents. If there are people who would struggle financially if you were to suddenly die, a life insurance policy will protect them from financial suffering and provide you with peace of mind.

The life insurance death benefit can pay for medical bills, funeral costs, mortgage payments, college tuition, student loans, and other debts and obligations if you die prematurely. Because life insurance benefits are typically tax-free, your family and dependents can do anything with the money that they need to.

Is it worth getting long term disability insurance?

Like life insurance, long-term disability insurance is a form of income replacement. But unlike life insurance, long-term disability insurance protects your income while you’re still alive.

For this reason, anyone who depends on an income to live or save should purchase disability insurance. If an accident or illness means you can no longer work, the long-term disability benefits pay out a percentage of your former salary for a length specified in your policy.

The chances of becoming disabled at some point in your career are higher than you might think— one in four people experience a disability at some point while they are employed and many of the disabilities people can experience go beyond the kind of workplace accidents that are covered by workers’ compensation. Cancer, back and muscle pain, and depression and anxiety are all examples of conditions that may bar someone from working at some point in their career.

The graph below demonstrates the plausibility of getting a disability at each age. You’ll notice that as you get older, the likelihood that you become disabled for longer increases.

Current ageLikelihood of a long-term disability before retirementAverage duration of a long-term disability
20-302.5 in 1026 months
31-403.3 in 1032 months
41-503 in 1042 months
51-602.3 in 1050 months
60+1 in 1054 months

Many people choose not to opt-in for disability insurance because they are covered by group insurance from their employer, but employer-provided disability benefits are usually short-term and don’t offer enough coverage to adequately replace your income.

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Why you should apply for life and disability insurance at the same time

Applying for long-term disability insurance is a similar process to applying for life insurance and applying for both at the same time ensures that you’re not lacking any necessary financial protection.

Both insurance policies require the following steps in the underwriting process to receive coverage:

  • A brief phone interview to discuss your medical history and financial viability

  • Medical exam

  • An attending physician’s statement, or an APS, to collect any information about any previous prognosis’ or answer any remaining medical questions

Additionally, the disability insurance underwriting process usually requires some financial documents to demonstrate income in order to build a policy that reflects your financial needs.

Disability insurance rates and life insurance rates can vary greatly by each insurer because each insurance company’s underwriting rules are slightly different. One insurer may view high-blood pressure more negatively than another; another might be more lenient about family history. A Policygenius agent can work with you to pull together both applications at the same time and find the best rates for your disability insurance and life insurance coverage.

How to apply for life and disability insurance at the same time

There are a few reasons why applying for life and disability insurance at the same time makes sense.

1. The best time to apply for insurance is now

Life insurance rates and disability insurance rates both increase as you age and it’s usually best to apply sooner rather than later — though there can be some exceptions to this rule, such as if you’re in the later stages of pregnancy or you have recently lost weight.

Delaying the application of either application will result in a coverage gap, meaning that your income and family won’t be completely protected.

2. Two applications, one timeline

Applying for both life and disability insurance policies usually takes about 4-6 weeks, but sometimes the process is longer if you have a complicated medical history and the underwriters request additional documentation. While applying for each policy is its own distinct process, applying for both at the same time means you’re spending less time overall going back and forth with the insurance company.

Though there are ultimately two application processes — one for life and one for disability — if you go through both applications through one broker, you can sign some of the same forms upfront and use the same lab work from your medical exam for both applications.

3. Take only one medical exam

For most people, one of the more arduous parts of the insurance application process is taking the medical exam, which is required by both life and disability insurance applications to get coverage. If you apply at the same time, you can use the results from the same medical exam for your life and disability insurance application.

The lab results from the medical exam are usually good for six months to a year, depending on your age and carrier.

4. Ensure that you’re covered

Another reason to apply to life and disability insurance at the same time is so you can ensure that both policies are as robust as you need them to be. If your disability insurance application is denied or if the rates you’re offered are higher than you can afford, you are still early enough in the life insurance application process that you can add some disability coverage to your policy and ensure that you’re financially protected.

Adding disability coverage to your life insurance policy

Long-term disability policies offer the most robust income protection if you become disabled and can’t work, but if you’re denied coverage or can’t afford the premiums on the policy you’re offered, you can add on a rider to your life insurance policy to ensure you have some disability coverage.

Some of these riders require additional underwriting and will usually increase your life insurance premiums, but they’re the next best thing if you can’t afford a stand-alone policy.

There are a few different disability riders you can add to a life insurance policy:

Disability income rider

You can add a disability rider to your life insurance policy that includes some benefits in case you become disabled and need to supplement your income. Insurance riders let you add additional coverage and rules to your policy, and a disability income rider adds coverage that is similar to a long-term disability policy, though it’s much less robust.

Waiver of premium rider

A waiver of premium rider protects your life insurance policy from lapsing if you are unable to work and therefore unable to pay your life insurance premiums.

The rider is usually only offered in the short-term and is often difficult to qualify for.

Accelerated death benefit rider

The accelerated death benefit rider allows you to tap into your life insurance policy’s death benefit while you are still alive if you’re diagnosed with a terminal illness. Life insurance companies will often add this rider to your policy at no additional cost.

Critical illness rider

Similarly to the accelerated death benefit rider, the critical illness rider pays out a lump sum from the death benefit if you become ill and can no longer work. The illnesses covered by this rider are determined by your life insurance company and policy, but usually include heart attack, life-threatening cancer, stroke, kidney failure, or ALS.

→ Learn more about what disability riders you can add on to your life insurance policy.

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