Life insurance for people with disabilities

Adults with disabilities can buy life insurance for themselves or have a caretaker purchase a policy on their behalf. Learn more about how life insurance companies evaluate different types of disabilities.

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Rebecca Shoenthal

Rebecca Shoenthal

Editor & Licensed Life Insurance Expert

Rebecca Shoenthal is a licensed life, disability, and health insurance expert and a former editor at Policygenius. Her insights about life insurance and finance have appeared in The Wall Street Journal, Fox Business, The Balance, HerMoney, SBLI, and John Hancock.

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Expert reviewed

This article has been reviewed by a licensed Policygenius expert to ensure that sources, statistics, and claims meet our standard for accurate and unbiased advice.

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Maria Filindras

Maria Filindras

Financial Advisor

Maria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

Updated January 19, 2022 | 5 min read

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If you have a disability or support someone who has a disability, life insurance is an important piece of financial protection. The specifics of your disability will determine what type of life insurance is right for you and who you should name as a beneficiary.

Whichever policy you choose, the goal when shopping for life insurance is to secure your loved ones and prepare for the worst. Adults with disabilities have the same choices for life insurance as any other adults, though some physical disabilities related to high-risk medical conditions can limit policy options.

Key Takeaways

  • Adults with disabilities are not disqualified from getting life insurance.

  • Parents and caretakers of adults with disabilities should name that adult or a trust the beneficiary of their life insurance policy.

  • Life insurance for children or a child rider on a parent’s policy can secure lifetime coverage for a child with disabilities.

  • Separate life and disability insurance policies offer the most comprehensive financial protection for your loved ones.

Can you get life insurance with a disability?

Having a developmental, physical, or any other type of disability does not disqualify you from getting life insurance coverage in most cases. Your application is evaluated and your premium is set using the same factors that are used for other applicants, including age, gender, medical history, and hobbies.

The more risk you present to the insurer — medical or otherwise — the higher your premiums will be.

→ Learn more about how your life insurance rates are determined

What do life insurance companies consider a disability?

According to the Americans with Disabilities Act (ADA), a person with a disability is someone who has a physical or mental impairment that substantially limits one or more major life activity: [1]

  • Breathing

  • Communicating

  • Hearing

  • Learning

  • Seeing

  • Sleeping

  • Walking [2]

Life insurance companies consider disabilities in the context of how they affect your health. Someone who was born blind would likely be considered lower risk than someone who became blind due to a medical condition such as diabetic retinopathy, for example.

The type and severity of your disability will inform the health classification and premiums an insurer gives you. Every life insurance application is evaluated holistically and each provider calculates risk differently. It’s important to compare quotes and providers with a licensed broker like Policygenius is the best way to find the most affordable policy.

Life insurance policies for people with disabilities

Life insurance provides your loved ones with funds for funeral expenses and other long-term needs. You should purchase a policy for yourself if you’re an adult with a disability who has:

  • Dependents

  • Caretakers

  • Outstanding debts

There are two main types of life insurance: term life insurance, which lasts for a set period and whole life insurance, which lasts as long as you keep paying premiums and has a cash value.

  • Term life insurance: Term life is best for most people because it’s 5 to 15 times cheaper than whole life. You only pay for it as long as you need it and can easily cancel when you no longer have debts or dependents.

  • Whole life insurance: A whole life policy is a good option if your disability is likely to worsen as you age or if you know you’ll have dependents into retirement and beyond. You’ll get lifelong coverage and your premiums won’t change.

Alternatives to traditional life insurance for people with disabilities

If your disability has a significant impact on your overall health or ability to care for yourself, you may not qualify for a term or whole life insurance policy. However, other types of life insurance can provide some financial support to your loved ones:

  • Final expense insurance: These policies — guaranteed issue and simplified issue insurance — primarily cover end-of-life expenses and allow you to skip a medical exam. There are age restrictions for both and health restrictions for simplified issue plans.

  • Group life insurance: Employers and other organizations often supply subsidized life insurance to employees with no health evaluation required. You may be offered less coverage than you need, but some insurance is better than none.

  • Joint life insurance: If your spouse qualifies for traditional life insurance, you may be able to buy a joint policy that covers both of you. You’ll be eligible for more coverage this way, but depending on your plan, you’ll lose coverage if your partner dies before you or your plan won’t pay out until after you both pass away.

  • Life insurance for veterans: If you’re a veteran with a disability, you may be able to continue the coverage provided to you during your service. If you became disabled while in service, you may qualify for additional coverage.

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Life insurance to protect dependents with a disability

If you care for an adult with disabilities who needs lifelong financial support, you have the same options listed above, including term life insurance and permanent life insurance. However, you would be the policyholder and the policy would provide financial security for a loved one with disabilities.

You can name your dependent, a trust, or another caretaker as your beneficiary to ensure your loved one gets the support they need: 

  • Name your dependent as a beneficiary if they don’t qualify for their own policy so they or their dependents have guaranteed financial support.

  • Name a trust or caretaker as a beneficiary if your dependent is unable to manage their finances to ensure that your death benefit is used for your dependent’s care.

It’s common to buy whole life insurance if you have a dependent with disabilities. The lifetime coverage means that no matter when you pass away, your dependent receives a payout.

Life insurance for children with disabilities

If you have a child with a disability, it’s important to have your own coverage that pays out to a trust or your partner. But, it’s also one of the few cases in which buying life insurance for your child might be wise. 

If your child’s health is likely to worsen as they age and make it difficult to find an affordable policy of their own, you can guarantee them coverage and save them some premiums by securing them a policy while they’re young.

→ Read more about buying life insurance if you have a child with a disability

Supplemental needs trusts

If you support an adult with a disability and they are unable to handle their finances or care, you can name a supplemental needs trust (also referred to as a special needs trust) as your beneficiary. 

Supplemental needs trusts allow you to specify how the funds should be used. A named trustee manages the funds within your specifications; a co-trustee, such as a lawyer or firm, will ensure the funds are being used correctly. This type of trust also ensures that your dependent can still qualify for needs-based benefit programs like Medicaid and Supplemental Security Income.

Work with a lawyer to create a supplemental needs trust to make sure it’s set up correctly.

Life insurance vs. disability insurance

Having a life insurance policy isn’t the same as having a disability insurance policy. Life insurance provides a lump sum to support your family after you die, while disability insurance provides an income replacement if you incur a disability and cannot work.

You can usually add a waiver of premium or disability income rider to a life insurance policy to waive your premiums or get a monthly stipend if you become disabled, but both are difficult to qualify for and provide limited coverage amounts.

If you want financial protection for your loved ones in the event of your death and a potential disability, it’s usually better to have a separate life insurance and disability insurance policy.

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If you have a disability, life insurance coverage is still available in most cases. If you can’t get approved for coverage, there are other options such as having a caretaker get life insurance and naming you as a beneficiary or non-traditional life insurance like guaranteed issue. Talk to a licensed insurance agent before you apply to compare rates and find the best company for your needs.

Frequently asked questions

Can I get life insurance coverage if I have a disability?

In most cases, having a disability won’t prevent you from getting life insurance coverage. If your disability affects your ability to work or has serious health ramifications, you may only qualify for non-traditional life insurance.

Do people with disabilities need life insurance?

If you have shared debts or anyone relies on your income, you should have life insurance coverage. Buying life insurance for a child with disabilities guarantees them lifetime coverage even if their condition worsens.

What’s the difference between life insurance and disability insurance?

Life insurance pays out a lump sum to your beneficiaries if you die. Disability insurance pays part of your salary if you are unable to work. For the most comprehensive coverage, it’s best to own separate life and disability policies.