Prior to June 10, 2013, disabled individuals residing in the UK could apply for Disability Living Allowance (DLA) to get financial assistance with costs associated with a disability or long-term medical condition.
As of this past June, Personal Independence Payment (PIP) gradually began replacing DLA for individuals ages 16 to 64 including those receiving lifetime or indefinite DLA awards.
PIP is designed to help affected individuals while they are still living. Life insurance was created to help living family members after an individual has died.
Being disabled does not decrease the value of your life. Many disabled individuals cannot work and must rely on benefits for income. However, this should not prevent them from qualifying for life insurance. Disabilities come in many forms and may have been present since birth or brought on by a serious accident or an illness.
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These factors will affect the terms of a life insurance contract and the premiums charged for this cover. They should not prevent disabled individuals from insuring their lives.
An individual with a minor disability that does not affect typical functioning may pay standard rates or only a small amount of premium loading. Someone with a disability that has or will probably affect major internal organs may have to pay higher premiums. Most disabled individuals fall between these two ends of the spectrum.
Four factors determine life insurance premiums for disabled individuals: severity of the disability, the extent to which the disability affects daily routine, the extent to which it damages vital organs and increases risk of other medical conditions, and the number of years by which average life expectancy is reduced due to the disability.
Each individual and his or her disability are unique so insurance providers must evaluate each life insurance application separately and very carefully.
An insurance company can only reject an application made by a disabled individual if it can prove that the noted disability will affect the life expectancy of the applicant. Different insurance providers view disabled applicants differently, resulting in a wide range of premiums. Applicants should compare the quotes they receive and if possible, work with an insurance professional who specialises in life cover for disabled individuals.
Disabled individuals who are rejected for standard life cover or who cannot afford the premiums may qualify for life insurance with preexisting medical conditions. This alternative life cover will not pay if the insured dies as a result of his or her disability. Many disabled individuals use this coverage to purchase higher limits of life insurance than they can afford when buying standard life cover.
Group life insurance is another alternative for individuals who are disabled. Applicants are not required to answer medical questions so the insurance company cannot reject most claims. With group insurance, funds are collected from several people, the majority of whom are in good health.
This allows the insurance company to reduce the risk of insuring people without knowledge of their health status. Disabled individuals can find group life insurance cover through their employers or professional organisations. Cover remains in effect as long as insured remains employed with the company or continues memberships in the relevant professional organisation.