Applying for life insurance requires many steps, details and personal information, and there’s no doubt it can be disheartening to find out you’ve been denied coverage after all your time and effort. However, being denied coverage doesn’t mean you’ll never be able to qualify for life insurance. In this article, we’ll help you understand why your application may have been rejected, other policy types you can consider and how to proceed with future life insurance applications.
1. Figure Out Why You Were Denied Life Insurance
If you’ve been denied life insurance coverage, you’re likely wondering the reasoning behind it. It could be for a variety of reasons, from your health, to your driving record, to the information you chose to include on the application. However, this doesn’t mean it’s impossible to get coverage. Below are some reasons why you could potentially be denied life insurance.
Pre-Existing Condition
If you suffer from a preexisting condition or chronic illness, there’s a chance a life insurance company will decline your traditional life insurance application. However, your chances of being accepted increase if you can show that your illness is being treated.
Health Condition Discovered During Your Medical Exam
When applying for life insurance coverage, you will be asked various medical-related questions. Therefore, it’s important to be both truthful and accurate when completing this information. Additionally, you may be required to take a blood or urine test (as part of the medical exam) to further understand your health and risk factors.
Here are some of the chronic medical conditions that may make it difficult to obtain life insurance coverage:
Severe anxiety or Depression
Asthma
Diabetes
Heart disease
Uncontrolled high blood pressure
Uncontrolled high cholesterol
HIV
Obesity
Sleep Apnea
Poor Driving Record
You may not realize the impact of your driving history on your life insurance approval. Speeding tickets, DUIs and other citations may demonstrate a pattern of risky behavior to a life insurance company. They may consider this behavior an indicator of your likelihood of premature death, which could lead them to consider you too risky to cover. This may lead to the denial of your application.
Inaccurate Information
Avoid providing any inaccurate, misleading, or false information when filling out and submitting your life insurance application. Doing so can cause your application to be rejected based on moral risk. In all cases, your application will be denied.
Don’t lie about or omit truthful, complete answers on your life insurance application related to possessing a criminal record, health issues, a history of mental illness, suicide attempts, risky hobbies, age, finances (such as FICO score), a poor driving record and more. Insurance companies will verify all the information you provide, so it’s important to be as accurate and honest as possible.
Age
The older you get, the more difficult and expensive it becomes to get insured. Many life insurance policies have an age restriction. Although your insurance agent should not put you through an application for a policy that doesn’t meet the age requirement, this could be a potential hang up and lead to application denial.
2. Confirm Your Life Insurance Application Information
You’ll want to make sure your application has the most accurate information. If something looks off or needs to be updated, now is the time to do so. Suppose you find the reason you were denied life insurance was because of insufficient or incorrect medical information. In that case, you have the right to contest their denial and provide the most up-to-date information.
3. Talk to Your Life Insurance Agent
Sometimes the first life insurance company you apply to isn’t always the best fit for you. Your life insurance agent fully comprehends the underwriting process and can help you better understand why you were denied and find a way to work around it. You can even work with an insurance broker who can do the shopping process on your behalf, finding you a carrier that will work with you.
4. Consider Other Life Insurance Policy Options for You
If the first type of life insurance you apply for doesn’t end up working out, there are a number of other types of life insurance options you can consider.
Group Life Insurance Through Your Work
Group life insurance is a popular benefit offered by many employers that works similarly to an individual policy. Group life insurance plans are often limited in coverage options but are typically easy to qualify for.
Simplified Issue Life Insurance
Simplified issue life insurance is a good option for seniors and individuals with health problems. Although approval isn’t guaranteed, your coverage will be based on a questionnaire about your health and lifestyle rather than a medical exam.
Guaranteed Issue Life Insurance
If you are between the ages of 45-85, you can’t be turned down for guaranteed issue whole life insurance. This type of life insurance is often a promising option for seniors or individuals with health concerns.
Final Expense Life Insurance
Final expense life insurance helps cover end-of-life costs, including funeral expenses, credit card debt, medical bills, and any other debt you don’t want to pass on to your family. Final expense does not require a medical exam, only a health questionnaire to help determine your coverage plan and premium.
No Medical Exam Life Insurance
No medical exam life insurance policies can be useful for individuals who aren’t interested in taking a medical exam, are concerned about their health, or have been turned down for traditional life insurance before.
5. Focus On What You Can Control
If you are denied and want to reapply or improve your chances of being approved for life insurance coverage, there are some things that you can control.
Here are a few ways you can take control and improve your chances for approval:
Exercise. Consider adopting a healthy routine of activities like walking, running, hiking, swimming, weightlifting or cycling to help improve conditions like high blood pressure, high cholesterol, obesity and more. Always consult a physician before taking up a new physical routine.
Lose Weight. Through diet and exercise, you can lose weight and improve your health. Obesity can lead to chronic health conditions like diabetes, high blood pressure, high cholesterol and even sleep issues.
Smoking Cessation. Quitting smoking can significantly improve your chances of approval. As always, consult your doctor before embarking on any major health decision.
Avoid Risky Behaviors. If you were denied coverage due to a risky hobby, like extreme sports, consider taking up a new and safer hobby to help improve your chances of getting life insurance coverage.
Improve Your Driving. If you have a poor driving record and moving violations, make an effort to drive more safely and try to take care of any outstanding tickets.
Improve Your Mental Health. Address and seek the necessary treatment for any mental health issues. This can help you when reapplying or seeking coverage from a different carrier.
By taking charge of the things that are under your control, you can improve the odds that you will be improved after reapplying. Of course, there’s no guarantee that every insurer will want to insure you or that you won’t pay more than an otherwise healthier and younger individual, but it can increase your odds.
Re-Evaluate the Life Insurance Coverage You Need
You can also re-evaluate the amount of coverage you actually need and can afford. For example, if you applied for a permanent life insurance policy and were denied, a shorter term policy, such as a 10– or 15-year term length, may be a better fit. Using a life insurance calculator can help you understand how much coverage you need and what you can afford.
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