Social Security and life insurance have some similarities. Both provide financial benefits that help your family. However, the insurance plan you have can impact the amount of Supplemental Security Income (SSI) you receive. In turn, being on SSI will affect the amount of coverage you can invest in.
Can You Have Life Insurance if You Receive SSI?
People who are disabled, blind, or aged 65 or older are eligible to receive SSI. But, the cash value of a whole or universal policy may disqualify individuals from SSI. Term life policies don’t have cash value and won’t factor into eligibility.
Social Security evaluates current earned and unearned assets to determine SSI eligibility. Wages from a job would be considered earned income. Unearned income is derived from passive sources, like alimony, savings, stock dividends, and life insurance.
People who receive dividends or have taken out a loan against their policy's cash value may have SSI limits.
Those who are already on SSI can purchase a new life insurance plan, but it’s best to consult an insurance agent before deciding on a policy. The insurance plan affects the amount of receivable SSI if the individual is already on it. In turn, the amount of money provided by SSI may limit the amount of purchasable life insurance.
How Much Life Insurance Can You Qualify for if You’re on SSI?
Those already on SSI have different insurance options. There are “Guaranteed Issue” plans ranging between $5,000 and $25,000. The policyholder won’t be asked any questions by the provider about their health and income. To qualify for higher levels of coverage, the provider will ask those questions.
Many collect SSI only due to reaching retirement age, as opposed to a disability. The largest allowable amount of purchasable death benefits will depend on your current income, not including SSI. Retired individuals are limited to a $50,000 policy. But, many exceptions can allow you to obtain higher limits.
It’s best to invest in life insurance before retiring. There are more providers to choose from and higher policy limits.
What Are Life Insurance Options for Those Receiving Social Security Disability Income (SSDI)?
Providers consider the type of disability an individual has before deciding on approval. Those with physical disabilities, like chronic pain, qualify for higher policy limits. Applicants on SSDI due to mental health or chronic conditions affecting their organs usually don’t qualify for a term life plan. Instead, they’re provided Guaranteed Issue policies.
For over 80 years, Stringer Insurance Agency has provided comprehensive life insurance to the residents of Dahlonega, GA. They offer plans from some of the best insurers in the country. As an independent agency, they can find a policy that meets your specific needs at a rate you can afford. For more information on their coverage areas, visit their website. To schedule an appointment, call them at (706) 864-3515.
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