Despite Down syndrome being one of the most common genetic disorders, individuals with Down Syndrome have a higher risk of being denied life insurance.

Owning or being the beneficiary of a life insurance policy might be a huge relief if you or your beneficiary has Down syndrome.

In this article, we will cover everything you need to know about life insurance for people with Down syndrome.

What is Down syndrome?

Down syndrome is a genetic illness caused by an extra copy of chromosome 21. There are three kinds of Down syndrome based on the number of chromosomes: 

• trisomy 21 (nondisjunction)
• translocation, and 
• Mosaicism

The disorder's symptoms can range from moderate to severe. In Canada, it is estimated that 1 in 781 children are born each year with Down syndrome.

Can you get life insurance if you have Down syndrome?

Getting life insurance with a pre-existing condition such as Down syndrome is possible.

As part of your application, medical records are examined to determine the severity of the Down syndrome and the applicant’s insurability.

The insurer's medical exam reveals whether or not the applicant is capable of caring for themselves without assistance. Finally, they take into account the applicant’s overall health. 

After looking at these criteria, the insurer assign a risk group. In terms of life insurance, the best tier is Super Preferred since it has the lowest premiums. People with average or below-average ratings are at the bottom of the rating scale and must pay the highest fees.

If you have Down syndrome, you are considered a higher-risk applicant. The National Association for Down Syndrome estimates that people with Down syndrome have a life expectancy of 60 years, which is below the national average.

The underwriting process considers potential medical conditions that some people with Down syndrome face, such as blood illnesses. Last, but not least, some people with Down syndrome are unable to comprehend or enter into an insurance contract due to a lack of cognitive ability.

As a result, some insurance companies will refuse to insure applicants with Down syndrome.

Applicants with low or mild degrees of Down syndrome, who are capable of entering into a contract, can get life insurance more easily. There are also guaranteed issue life insurance options available in other cases.

Regardless, you should expect to pay above-average insurance rates. Some health insurance companies have a "pre-existing condition" category that automatically places policyholders in a higher-priced tier, generally with a 25% price increase. This category may include adults with Down syndrome whose condition is mild enough that the disorder does not have a significant impact on their day-to-day.

Group life insurance options for people with Down syndrome

You may be eligible for group life insurance through your employer if you have mild signs of Down syndrome and work full-time (defined as 30 or more hours per week). It is common for employers to provide their employees with group life insurance as a benefit.

The majority of group life insurance policies are term policies. Death benefits on term life insurance policies are paid out only if the insured passes away during the policy's specified coverage period.

Group life insurance plans, however, are only available to people with Down syndrome who are of legal age and can understand the documentation they are signing. Being unable to read or sign legal documents disqualifies an individual from receiving group life insurance.

Guaranteed Issue Life Insurance for People with Down Syndrome

Guaranteed issue life insurance is another type of policy that may be appropriate for your needs. There are no medical exams and there is no expiry date on a guaranteed issue life insurance policy, unlike term policies. You just complete the paperwork to finalize your application.

The downside is the payout upon death is usually smaller, typically $25,000 or less. Guaranteed issue insurance also usually costs more than traditionally underwritten insurance.

How do parents buy life insurance for a child with Down syndrome?

It's possible to buy life insurance for a family member with Down syndrome. It is also typically cheaper if you begin the process while they are still a child. 

This is the most cost-effective way to insure someone with more severe forms of Down syndrome. Because the insured is still a minor, they will pay lower premiums while being protected from an early age.

Keep in mind that even if you begin covering your loved one at a young age, rates may be higher if your child with Down syndrome frequently experiences other medical conditions.

Dundas Life recommends investing in whole life insurance to ensure that they have coverage when the term expires. An insurer will verify the information you provided to the insurance company and may require further evidence to ensure its accuracy.

Following an application review, your chill will either be: 

• approved for the policy with the required death benefit
• Approved for a smaller policy amount, or 
• denied coverage

If the policy is approved, the beneficiary must be a parent or legal guardian.

Should parents of children with Down syndrome buy life insurance?

If something happened to you, who would look after your child? 

When deciding whether to acquire life insurance for their children with Down syndrome, many parents ask themselves the same question. By getting life insurance as their guardian, you can ensure your child will be taken care of financially if something happens to you. 

You may also consider naming a trust as the beneficiary of your life insurance policy for the child. When you pass away, your child's special needs trust will care for them, and you can direct how the death benefit is used to ensure their ongoing care.

Conclusion

Getting life insurance when living with Down syndrome may be a smart decision. It provides you and your family with peace of mind by assuring their financial security in the case of your death. 

Navigating buying life insurance with a pre-existing condition can feel overwhelming. Reach out to Dundas Life’s team of expert advisors today to help protect your loved ones today.