Even if you receive additional security income, you are still eligible for a new life insurance policy. The Social Security Administration will not interfere with your ability to get new life insurance. This blog seeks to make the sometimes-confusing Social Security asset limitations and other eligibility conditions more understandable.
A payout from a life insurance policy typically has no impact on your Social Security benefits if you are receiving them as a result of retirement. However, if you are disabled and receive benefits from the Supplemental Security Income (SSI) program, life insurance may lower your Social Security payment. In addition, money obtained from life insurance loans or income from permanent life insurance would be counted as resources. Utilizing these life insurance policy provisions could therefore result in a decrease or halt to your SSI payout, depending on the amount.
The underwriters at insurance companies view life insurance as "income replacement" insurance and, in most cases, do not consider Social Security benefits. Your financial qualifying and rationale are affected if you are not working, either because of a handicap or natural retirement.
Insurance companies will inquire as to whether you are receiving SSDI or SSI (Social Security Income) (Social Security Disability Income). Whether you retired due to old age or disability determines the type of Social Security you get.
SSI through retirement: The maximum insurance death benefit granted will be based on your current income, exclusive of SSI, if you receive Social Security Income (SSI) purely because you have reached retirement age (and not because of a handicap). As a result, it's often preferable to apply while you're still employed if you're close to retirement. There will be more companies to pick from, and the policy limits will be higher.
SSI through disability: The insurance provider will take into account the reason for the disability claim if a person is receiving social security benefits as a result of a disability. It is better to call and explain the situation if you are solely receiving VA benefits. It will be viewed more favorably if it is a physical handicap rather than a psychological one, like PTSD.
As life expectancies decline, it is increasingly important to prepare for unforeseen events. Future planning in the event of death is a critical component of this preparation. Contact us today at Kneller Insurance if you're looking for proper life insurance.
