Good news! The majority of the time life insurance with an amputation doesn’t involve a bunch of extra premiums. Only a few situations will result in a rating or decline, but those are few and far between.
There are roughly (depending on the company) 16 rating classifications. Each will determine the rates you pay. Both rates and qualifications will vary between companies.
Since there are over 850 life insurance companies in the United States, this can make finding the best fit for you and your family tricky.
How to Save Money on Life Insurance with an Amputation
There are several ways to save money on life insurance for an amputee. Not every tip may be appropriate for your situation, but it’s good to keep them in mind.
Speak with an Independent Agent
There are two types of agents in the insurance world, independent and captive agents.
Independent agents can offer products from multiple companies. They are not bound to any one company.
Captive agents are bound by contract only to sell the products from one insurance company. Just being able to offer one company means that all the underwriting rules are the same. If that company happens not to rate amputees as well, then there is nothing you can do about it.
An independent agent can shop the market for you. They have the experience to know which companies give the best rates depending on whether the amputation resulted from an accident or a disease. They can compare rates for you and save you both time and money.
Term is the Cheaper Option
Term life insurance is the lowest cost life insurance option for most people. It doesn’t have all the bells and whistles of permanent life insurance. Nor does it have the shortcuts that a non-medical exam or guaranteed issue policy does.
Depending on your circumstances, term may be the best choice for you. If you are only looking to cover a specific period, like a mortgage or children growing up, then term can save you bundles of money over the years.
On the other hand, something that will cover you for life may be better. If you worry about your adult children having to cover the costs of your funeral or leaving a spouse without income, permanent life insurance can ease that burden.
Purchase Multiple Small Policies Instead of One Large One, if Needed
There is a term in the life insurance industry called layering. It means to take out several policies (layers) that will overlap at times.
For example, you might find that getting a decreasing term policy to cover your mortgage plus another smaller whole life policy to cover burial costs will cost you less than one sizeable permanent life insurance policy. After all, you wouldn’t need the term policy after you pay off your house in this example.
The thing to remember here is to never apply to two different companies at the same time. They run a check to see what other companies you have applied with. If this throws up a red flag for them, the underwriters start to worry about insurance fraud. Just explain to your insurance agent that you want to layer policies. They will know what that means.
Renew Instead of Requalify
If you already have a term life insurance policy, renewing it might be cheaper than requalifying.
Many companies will allow you to renew the term or convert your current policy into a whole life policy. The beauty of this trick is that there is no underwriting. It doesn’t matter what happened to you between when you initially took out the policy and right now. Your health class will be the same.
Shortly before your policy expires, your insurance company will mail you something about this. As soon as you get that letter, call up your insurance agent and have them shop the market for you. Let them know any change in your health since you last applies (i.e., what was amputated and why.) They can compare a new policy to the new rates on your renewal.
(When you renew rates will be higher because of your age, not your health class.)
How Does an Amputation Affect Life Insurance Rates?
One of the factors to consider when applying for life insurance with an amputation is how it happened. That is one of the first things any insurance agent will ask you because that’s one of the first things an underwriter will ask them.
Amputation Caused by an Accident
- Auto injury
- Congenital disability (technically not an amputation, but the physical impairment is the same to an underwriter)
- Hobby accident
- Professional sport/racing
- Wartime injury
- Work-related accident
The second differentiation is whether the amputation is disease-related. Disease-related amputations cause more concern to an insurance company than an accident.
Depending on the disease, it could mean other underlying health issues that might affect your lifespan.
At the end of the day, the insurance company is most concerned with how long you are likely to live.
Amputation Caused by Disease
Amputations caused by diseases are treated differently than those caused by accidents or other reasons. Diseases like diabetes or peripheral artery disease (PAD) will probably result in a decline from most life insurance companies.
The reason life insurance companies are so hard on people with amputations caused by disease is that life expectancy becomes more difficult to predict. Conditions can worsen and become difficult to manage.
Just because you cannot get a standard policy doesn’t mean that you are up a creek without a paddle. Guaranteed issue life insurance is an option, and several policies are affordable for most people.
Choosing the Right Type of Life Insurance with an Amputation
Choosing the right type of life insurance can be tricky for anyone. Medical concerns make it more difficult.
Depending on the reason for removal as well as how it affects your quality of life, you have the option for traditional insurance. It would be up to you and your family whether you choose term or permanent life insurance.
The other scenario is when you had an amputation resulting from a disease. This can severely limit your options. You may have to look into no exam or guaranteed issue option.
Term Life Insurance with an Amputation
Without a doubt, term life insurance is the most affordable type of life insurance available. It’s also the easiest because it only pays death benefits.
You buy term in periods of time, usually in 5-year increments. Some companies will allow you to customize your term length. Others will set your term to a certain age. For example, you might choose to have life insurance until age 67 when you plan on retiring.
Most term policies require full underwriting which includes a medical exam.
Permanent Life Insurance with an Amputation
Permanent life insurance includes whole life and universal life. To make it extra confusing, each company names their policies differently. Some features that a whole life policy from Company A might not be included in a similar whole life policy from Company B.
Permanent life insurance is more expensive than term insurance for two reasons. First, everybody dies. So the insurance company will have to pay the claim at some point. Second, a permanent life insurance policy has extra features like a cash accumulation value.
While term policies are simple, if you are looking at a permanent life insurance policy for your family, it can be helpful to have a life insurance agent help you customize the policy to your needs.
No-Exam Life Insurance with an Amputation
These are sometimes called simplified issues policies. They are just like other policies except the life insurance company does not ask for a medical exam. They will ask roughly six questions on the application, but that is all the medical information they want. No exam or deep family history probe.
You can get a no-exam policy as either term or permanent life insurance.
No-exam policies are more expensive than traditional life insurance policies. Life insurance companies assume that a person looking to avoid a medical exam will be a higher risk than someone who doesn’t mind taking it. Therefore they have to charge more to cover that risk and stay in business to pay out future claims.
The good news is that these policies are becoming increasingly popular. Because more people are asking for them, more companies are providing them. More choices available means the rates are going down.
The other catch with a no-exam policy is they have a lower death benefit or face amount. Most life insurance companies will not offer more than $250,000. Although there is one company, who will go as high as $500,000.
If you dislike needles or just don’t want to deal with the hassle, then a no-exam policy might be a better option than the traditional route.
Guaranteed Issue Life Insurance Options
You see guaranteed issue life insurance policies advertised all the time on TV. Skip them if you can. While it sounds great on paper, the strings that come attached to these policies are nuts.
To start off, they have graded benefits. For the first several years of the policy, your beneficiary won’t get the full amount. The first two years might be 110% of the paid premium returned. Years 3 and 4 might be 60% of the face amount. You typically have to survive 3 to 5 years after you take out the policy for your family to see the full amount.
They are also expensive and only offer up to $25,000 (sometimes $50,000 benefits.)
If you have a disease that resulted in a needed amputation, this might be your only option for life insurance. Talk to your agent and be upfront about any medical conditions. They can help guide you toward the best plan for your situation.
Underwriting Factors When Finding Life Insurance for an Amputee
Aside from the reasons behind an amputation along with all the other medical details, there are a ton of things the underwriter will want to know.
The following factors will determine your health class:
- Biological sex
- Family history
- Height and weight
- Cholesterol/Blood Pressure Levels
- DMV Record
- Pre-existing health conditions
- Foreign travel
- High-risk occupation or hobby
With an amputation, there are 3 additional considerations that will affect your health class.
- Amputation caused by any manner other than disease
- Amputation caused by disease
- How the amputation impacts your quality of life
If none of the three above factors affect your life expectancy, then the amputation will not affect your rates. Meaning you can get the best rate classes if you would otherwise qualify.
Since an amputation caused by disease will usually impact your expected lifespan, underwriters do tend to rate those if they make an offer at all.
If your amputation does not affect your life expectancy in any way, you can even get a preferred best rating.
How Abrams Insurance Solutions Can Help
Every family deserves the peace of mind that comes with knowing that should the worst happen, their loved ones will be okay. A medical condition outside your control shouldn’t change that right.
As independent agents, we work with over 70 of the best-rated companies in the country. We have the companies compete with each other for your business to find your family the best policy at a premium your wallet won’t flinch at.
Use the Instant Quotes tool with the above guidelines to see what your rates could be. If you have any questions or are ready to apply, give us a call at 858-703-6178 today.