Life Insurance with Asperger’s Syndrome
Did you know that 1 in 59 children in the US has been diagnosed with Autism Spectrum Disorder (ASD)?
Cases of autism (which includes Asperger’s) is more common than many people realize. If you’re a parent or a relative of someone who has been diagnosed with ASD, specifically, Asperger’s, this article will help you learn about getting life insurance for them or yourself.
Can I Get Life Insurance If I Have Asperger’s?
Here’s the straight answer:
In most cases, yes. Unless the person has Rett syndrome, childhood disintegrative disorder (CDD), or are suffering from muscular or cognitive disabilities, there’s a very good chance to get approved for a policy.
Asperger’s has been considered a less severe form of autism. Asperger’s was the term used to identify certain people who had specific social and behavioral differences. Compared to autistic individuals, individuals with Asperger’s were able to speak normally and function with regular cognitive behavior.
Within the Autism Spectrum Disorder (ASD), Asperger’s is on the low end. They are even described as “high-functioning autistics” by some specialists.
In most cases, they have creative talents and even excel at some academic subjects but generally have a hard time expressing themselves and socializing with others. Social cues are something they can’t easily identify, leading some people to tag them as “quirky”.
These findings, of course, only further highlight the fact that Asperger’s is not an extreme form of autism and this gives people with this condition a better chance of getting insured.
The Best Type of Life Insurance for People with Asperger’s
There are two main types of life insurance: Term and Permanent. Knowing how both work will help you understand its pros and cons and guide you in choosing the right policy.
Term Life Insurance
Also known as “Pure life insurance”, it pays a death benefit to beneficiaries when the policyholder dies, while the policy is in force. Typical lengths of term insurance coverage are 10, 15, 20, and 30 years.
Your premiums won’t increase while the policy is active. If your 20-year policy comes with a $10 per month premium, you won’t have to worry about the insurance company jacking up the price for whatever reason. However, do note that once the policy expires, expect to pay more if you renew the policy (due to the risk increase that comes with age and decline in health).
Term life insurance is the most simple form of life coverage. You’re just paying for the guaranteed death benefit and nothing else. And it’s what makes it cheap too—-compared to permanent life, term insurance can be 5-10 times less expensive.
The trade-off, of course, is that you get nothing back if you outlive the policy.
Permanent Life Insurance
It’s a type of coverage that lasts a lifetime and features a cash value or savings component. As long as the policyholder is paying the premiums, coverage will remain in effect.
It’s more expensive than term life because a portion of your premiums go into paying the “cash value”, which acts as a built-in savings mechanism. The money in the cash account is invested and grows based on the performance of the investments.
The policyholder can borrow/partially withdraw against the cash account and use it for whatever purpose they need (terms and conditions apply). It can also be used to pay for premiums, especially when it has grown enough to sustain steady earnings via interest.
Permanent life insurance has multiple subtypes, here are some of the most popular ones:
The most basic form of permanent life insurance. You get lifetime coverage at a fixed premium rate and a cash value feature.
Variable Life Insurance
A type of permanent life insurance that allows most of the premiums to be invested in an investment account. You can opt to invest your money in the following: mutual funds, bonds, fixed-income, and stocks, among others.
The key feature that Universal Life has over other types of permanent policies is its flexibility, whether in premiums or in the benefit. It’s different from Variable Life and VUL in terms of how the cash value grows as it earns from interest paid on premiums, not based on the performance of the variable funds.
Indexed Universal Life
A type of universal life insurance whose investment strategy mimics a particular index like the S&P 500 or NASDAQ100. The performance of the stock index determines the rate of interest credited to your policy.
Variable Universal Life (VUL)
A policy that combines the features of variable and universal life insurance. VUL lets you decide on the amount and frequency of premium payments. The cash value money is invested in mutual fund sub-accounts.
Guaranteed Universal Life Insurance
Also known as “No Lapse” insurance since the length of the policy is age-specific that goes beyond 100 years of age. Compared to other forms of permanent life insurance, it’s cheaper.
Also known as “Burial Insurance”. Typically purchased by older policyholders as a means of providing funding expenses that will be incurred upon death.
No Exam Life Insurance
This type of life insurance promises a guaranteed death benefit without the need to take a medical exam. The trade-off is that it’s significantly more expensive than other forms of insurance.
So which of these types of insurance is the best for a person diagnosed with Asperger’s? In most cases, permanent life insurance is the right choice since the coverage will last a lifetime as long as premiums are paid.
Let’s take a look at three possible scenarios when getting life insurance with Asperger’s.
Life Insurance for Parents of Children with Asperger’s
If you’re the parent of a child who has Asperger’s, getting life insurance is one of the best ways to ensure that they will have the necessary funds to support their living needs should you pass away.
As mentioned earlier, a permanent life policy is your best choice mainly because of its non-expiring nature. Term life is usually purchased as income protection until the beneficiaries get older and can support themselves.
However, since the child has Asperger’s, there’s no guarantee that they can support themselves easily as adults. And depending on the nature of Asperger’s, some may require special treatment which requires more financial resources.
Naming a Custodian
One important thing to note is that insurance companies cannot pay benefits to minors (below the age of 18-21). If your child is a minor, you’ll have to name a custodian to designate your child as the beneficiary. Not appointing a custodian early can cause problems and delays in claims later (the court will assign one if the policyholder failed to name a custodian).
If you prefer not naming a custodian, another way is to set up a special needs trust (or supplemental needs trust) that will allow the policyholder to set specific rules and instructions on how the benefits will be utilized.
It works by having two trustees: One that you select for managing the funds, the other will be a legal firm or lawyer that will ensure that the funds are being used per your instructions.
Types of Policies
Some parents opt to purchase a Survivorship Life Insurance policy, also known as “Second-to-die Joint Insurance” as it can be cheaper than buying two separate policies. It will pay out the death benefit only when both policyholders have passed away.
The other option, “First-to-Die Joint Life Insurance”, is the reverse: It will pay out the death benefit when the first of the two parents die. It won’t pay out a benefit on the second parent’s death.
Both options could be a good solution to the problem of one of the parents getting denied an individual policy.
Life Insurance for Children With Asperger’s
One of the top reasons why parents get a life insurance policy for their kids with Asperger’s is to protect the child’s insurability. Even though it will never be as cheap or as valuable (in terms of benefit) compared to regular policies, it helps guarantee protection for your child as they grow older.
Another popular option is to add a child rider into your own policy. For a minimal annual fee on top of your premium, you can get your child covered for a small $10,000 to $25,000 death benefit. Some insurance companies allow the policyholder to convert it to a whole life policy when you turn 65 or your child turns 25.
Life Insurance for a Policyholder With Asperger’s
If you’re an adult with Asperger’s and are looking to get a life insurance policy, there’s a good chance you’ll get approved. Just like everybody else, your risk rating (and your premium) will depend on your overall health and other factors like age, lifestyle, and how Asperger’s affects your life.
The following section discusses how the premiums are determined for people with Asperger’s. And what one trait is most looked at by underwriters.
Life Insurance Ratings for Asperger’s
How a person with Asperger’s will be rated for the premiums will vary from one person to another. However, there are plenty of factors in consideration during underwriting.
Asperger’s Syndrome is incurable. However, there are plenty of ways to help the patient cope and function as a normal person. Medication, special education, and behavior modification are some of the most popular ways.
So how will an underwriter assess an applicant with Asperger’s? In general, underwriters look into the person’s Intelligence Quotient (IQ) as one of the main factors for determining health ratings.
Fisrt, an IQ of 70 or above (common range for people with Asperger’s) can be classified with a Standard rating. That is if there are no other mental disorders, epileptic episodes, or other behavioral problems.
A result between 50 to 70 will likely receive a table rating.
Lastly, an IQ of less than 35 has a very slim chance of approval. But someone who has an IQ of 35-49 may still qualify for table rating. This is granted that there are no mental or behavioral disorders.
Aside from determining the person’s IQ levels, the underwriter needs to know if and how Asperger’s affects the patient’s day to day living. Since the goal is to quantify an applicant’s risk, knowing what potential actions or events that are related to Asperger’s can increase this risk.
Here are the most common questions asked when underwriting people with Asperger’s:
- Is the condition affecting your daily living conditions at home or at work? If yes, how?
- Has your condition caused any physical ailments such as muscular defects?
- Where do you fall in the autism spectrum?
- Are you currently taking any medication for your Asperger’s? If yes, what are they?
- Do you have any other ailments or medical conditions?
These, of course, need consideration along with the person’s overall health and physical condition. While someone with Asperger’s might have a 70 or higher IQ level, that doesn’t automatically guarantee a Standard rating. If the person is also overweight, has a heart condition or other physical ailments, then that will likely negatively affect the final grade.
The Bottom Line
Getting life insurance with Asperger’s doesn’t need to be difficult. Knowing how someone with the condition gets assessed and which factors underwriters look into (as discussed above) can help give better insight on what to expect when applying for a policy.
As with most special cases, we recommend getting help from a professional life insurance agent. They can help you look for the best possible deals using their experience and connections. And they make sure you can choose from a wider range of options.
With hundreds of insurance companies today, it can get really confusing when deciding which one to pick. And even after you’ve zeroed in on one, your next problem will be figuring out which plan to get, which riders should you include, and so on. It can get pretty overwhelming if you don’t know what you’re doing.
If you don’t feel like going through these types of problems and guesswork, speak with us today. Or get a free quote!
Lynda M. Thomas
I have an adult son with Asperger. High functioning, I would like to explore a term life insurance policy for him. please contact me ASAP.