Insurance companies, like most other companies, rate risk against potential loss. For a life insurance company this means that they prefer clients who are going to live a long time (and pay them lots of premium) against those that may potentially have a shorter lifespan (and pay them less premium).
If the insurance company can collect 40+ years of premiums they can normally invest it in enough ways to be able to not only pay the policy holder’s next of kin the agreed amount, but also make a profit in the bargain as well.
This is one of the reasons why you have to fill in all of those forms asking about your private life when you apply for life insurance, e.g.
- Do you smoke?
- Do you partake in any dangerous or hazardous activities?
- Do you have any motoring convictions? (This may sound like a strange one, but if you are in the habit of driving badly, you are more likely to die prematurely in a vehicle accident)
- Does anyone in your family suffer from heart problems, blood disorders etc. (If they have one, there is a strong chance you’ll have it to)
- Do you suffer from any disabilities?
- Etc. (The list goes on and on)
Do you suffer from any disabilities? What they mean to say is do you suffer from any disabilities that are likely to shorten your expected lifespan?
If the answer to this is “yes”, you may have problems getting insurance, or at least affordable insurance, as
Firstly, you need to be honest with both yourself and the insurance company.
Should you feel that your insurance company is unjustly asking you for extra premium because of a disability that is not life threatening, you can either present them with the facts and ask for a premium reduction or change your insurance company.
If your disability is likely to shorten your life, you can still find affordable insurance. You may not be able to find access to the more diverse forms of insurance available (such as permanent life insurance which allows you certain service akin to an investor), you should be able to find adequate insurance to cover the costs of an untimely death. You can search the internet for such insurance companies that offer reasonable rates, or you can talk to specialist groups that cater for your specific disability (either on-line or in person at user groups) and see which companies they recommend.
Depending on where (or if) you work, your company may be able to assist in finding you life insurance, by putting you on their corporate insurance policy (These policies insure all, or a large group of employees at a company and do not take into account individual medical conditions). Unfortunately these policies are normally restricted to large companies or corporations.
One point to note about any form of life insurance is that an insurance company cannot cancel the policy of an existing customer unless they can prove fraud, or the payment of premiums is halted. This means that if you had life insurance before you became disabled your insurance company cannot cease coverage because of it.
Being disabled should not exclude you from any walk of life, and being insured is one of those areas. Depending of the severity of your disability you may find premiums higher than normal life insurance. You shouldn’t let this deter you. With a little bit of searching, assistance from the right areas and determination you are sure to be able to come up with a solution that puts your, and your family’s mind at rest.