While being declined for life insurance is never a good experience, it is not the dead-end when it comes to securing financial protection for your family.
If you had been “rated” or “declined” for coverage in the past, it doesn’t mean that you have to live without life insurance in the future. It just means that you probably have applied to the wrong company.
Life insurance companies use underwriting to determine how much your premium will be but also if you will qualify for coverage. You see, every life insurance company has different underwriting guidelines for every health condition. Just because Company “A” has declined you, doesn’t mean the next company won’t approve your application.
The biggest misconception for those who have been declined for life insurance in the past is that there are no other options for them.
The good news is that you can still get life insurance even with a past declined life insurance application.
In this article, we will discuss some of the reasons why an insurance provider rejects an applicant, and what you can do to get coverage.
DIFFERENT OUTCOMES OF LIFE INSURANCE APPLICATION
After your life insurance application has gone through the life insurance companies underwriting process, the life insurance company will decide on your approval in 1 of 4 ways:
- Approved as applied – this is the best application outcome. Your application is approved at the same amount of premium you were initially quoted.
- Approved other than applied – you are approved for coverage but at a rate which is different than what you applied for. The rate or premium amount could be better, but it is usually worse than expected. You will need to approve the new premium amount before they will finally issue the policy.
There are many reasons why your approval decision is different than what was applied for. The result of your medical exam may cause you to be rated, or you may have neglected to give relevant information that was discovered during underwriting.
- Postponed – this typically happens if a disease diagnosis or treatment is very recent, and the insurer is not willing to gamble on a medical issue reoccurring. Most insurance companies will tell you to apply again in 6 months to 5 years after treatment. If your application is postponed expect to get detailed information on how to get coverage in the future.
- Declined – this is the worst outcome. The insurance provider you applied for isn’t willing to give you any coverage at all. Read on to know the reasons why life insurance companies will decline your application.
REASONS YOU’LL GET DECLINED FOR LIFE INSURANCE
#1. An elevated level of Cholesterol, Lipids, and Triglycerides
Your application for life insurance may be denied if you have elevated cholesterol levels. In some cases, it may not be a reason for the decline but being approved other than applied for because you are at higher risk for heart disease and stroke.
#2. Elevated Glucose or Blood Sugar Level
High glucose or blood sugar level can be an indication of diabetes which is a cause of the decline. To understand this, we have put a separate article on diabetes. If you have diabetes, please read our article Diabetic and Diabetes burial insurance eligibility.
A high blood sugar level is often not discovered by an applicant until they undergo a medical exam. This is because high glucose or blood sugar levels usually have no noticeable physical symptoms.
#3. Overweight or Obese
Height to weight ratio is one of the determining factors in getting approved at the best rate possible. Additionally, it also indicates your general health and fitness level.
Being overweight or obese may not always cause a decline, it usually results in higher premiums. But, a decline is most likely the outcome if it exists with other health risks.
Being overweight or obese is a red flag for life insurance companies because it can often lead to severe health complications, specifically cardiovascular issues.
#4. Elevated Liver Function
Life insurance companies may deny your application if they found out you have a high liver function. This condition can indicate inflammation or damage to the liver cells. It can be mild or temporary, but sometimes it can mean more severe liver problems.
If you have mild liver function and denied life insurance, try to reapply with other insurance carrier or get a new medical exam to get a better rate.
#5. Blood or Protein in the urine
From the point of view of the insurance companies, the existence of blood or protein in your urine could indicate kidney disease. This is the reason why life insurance companies would typically reject a life insurance application.
If you just discovered on the life insurance medical exam that you have any form of Hepatitis, it would mean a decline. However, Hepatitis B or C that has been diagnosed and treated will not cause you denial once your treatment is complete.
To get life insurance coverage, you must first begin some type of treatment for Hepatitis. The treatment regimen can make you qualify for life insurance approval at a later date.
#7. A History of Cancer
Having a history of cancer puts you in a high-risk category in life insurance. Your life insurance approval or decline will depend on the type of cancer that you have and how long you had been in remission.
Skin cancer is viewed as a less severe form of cancer which is typically approved by life insurance companies. The more severe types of cancer like breast cancer and lung cancer may cause a decline.
#8. HIV or AIDS
Even though survival rates for HIV or AIDS has improved over the years, some life insurance companies still consider them as high risk and may deny your application. We know of a few life insurance companies that look favorably to HIV patients, and those are the companies that you need to apply to.
#9. Oxygen Use
Every single life insurance company will inquire about oxygen use. There is only one scenario where you can secure life insurance with use of oxygen. That one exemption is sleep apnea. If you use oxygen other than for sleep apnea, your life insurance application will be declined. Oxygen use is considered an uninsurable condition and the only option for life insurance coverage is by taking a guaranteed issue life insurance.
#10. Need assistance with Activities of Daily Living
Activities of daily living are classified as eating, bathing, dressing, toileting, and transferring. If you need assistance with these, you will be automatically declined for traditional life insurance. Almost every life insurance company will not issue coverage to anyone who needs help with their ADL’s. You will need to buy guaranteed issue life insurance if you need life insurance coverage if this applies to you.
#11. Positive Alcohol Marker
Having a few drinks will not create a positive alcohol marker. A positive alcohol marker is indicative of elevated liver functions from alcoholism. A positive alcohol marker is the easiest way to receive a life insurance rejection. Alcohol abuse can damage health and has the potential to make the applicant engage in life-threatening activities.
You may need to delay your application until you entirely stop drinking and you remain sober for some time before applying.
#13 Hazardous Occupations
Some occupations are more dangerous than others. Life insurance companies are reluctant to approve coverage if you are working in a hazardous trade. If you are working in a dangerous occupation, don’t be surprised if your life insurance application will be denied.
The 10 Deadliest Jobs according to Forbes Magazine is as follows:
- Airline pilots and flight engineers
- Drivers and truck drivers
- Construction laborers
- Fishers and related fishing workers
- Logging workers
- Farmers, ranchers, and other agricultural managers
- Structural iron and steelworkers
- Electrical power-line installers and repairmen
- Refuse and recyclable material collectors
#14. Hazardous Hobbies or Extra-Curricular Activities
For some people, it’s not their job that gets them in trouble with life insurance companies, but their hobbies or extra-curricular activities. Just as some jobs are more hazardous than others, some hobbies are considered dangerous too because it can lead to premature death.
Some common hazardous hobbies include recreational flying, skydiving, scuba diving, bungee jumping, and base jumping. If you participate in any of these, you may find it difficult to get life insurance.
#15. Your Driving Record
A motor vehicle accident is one of the leading causes of death for a healthy individual. A history of multiple tickets, vehicular accidents, driving under the influence (DUI) could lead some life insurance companies to either deny your application or postpone your life insurance application until you can demonstrate a reasonable history of clean driving.
#16. Income Limitations
Some insurance companies refuse to write a life insurance policy for people whose household income is less than a certain level. That level may vary among life insurance companies. They give this restriction to avoid insuring people below a certain income level to reduce their own costs.
Another reason why lower-income can prevent your approval is that insurance companies have to justify your policy. If you ask for a million-dollar life insurance policy but you have no assets and hardly make $20,000 a year, your intent may be dubious, and there is a good chance that you will be denied coverage.
#17. Previous Declines
Insurance companies subscribe to the Medical Information Bureau (MIB) which shares information about prior life insurance approvals and denials on their life insurance applications. MIB reports protect the life insurance companies from applicants who lie about their current medical condition.
Previous declines on MIB report will be a problem to those who applied for life insurance in the past for a medical reason that may no longer exist. However, just because you have been denied in the past, doesn’t mean other life insurance companies can never approve you for life insurance.
WHAT TO DO AFTER YOU HAVE BEEN DECLINED FOR LIFE INSURANCE
If you have been rejected for life insurance coverage recently, you must know the exact reason why you had been declined to avoid more life insurance rejections in the future.
Here’s what you can do after your application for life insurance has been declined:
- Know the reason for your denial
If you have been denied life insurance coverage, it’s your right to know the exact reason why you have been declined for coverage. You should receive a letter from the insurance company why they decline your application. If they fail to send this to you, you can write a written request asking for detailed information about your rejection.
As soon as you get the facts of your decline, contact Funeral Funds to discuss your other options for coverage.
2. Ask for your test results
If you’ve been declined because of your medical exam results, get copies of your medical record used by the life insurance company in rejecting your application.
Compare your medical records and check with your doctor for accuracy. If there are any mistakes, you’ll need to make sure that the information is corrected because it will appear in MIB.
You will need your medical exam results to know the reason for your denial.
This information will help you avoid a repeated denial in the future, and determine your next course of action.
3. Work with an independent life insurance agency
Even with proper research, you may not get the right company suited for your needs. Every life insurance carrier has different underwriting guidelines for various health conditions.
Only an independent life insurance agency will know this, and they can place your application with the company that will likely approve your application.
A highly experienced life insurance agency can assess your information and find you the best plan at the lowest rate. Working with an independent life insurance agency like Funeral Funds will save you time and money. Our services are free, and it won’t cost you a cent than if you applied to a life insurance company on your own.
4. Appeal your case
If you don’t agree with the life insurance company’s decision regarding your application, you can appeal.
For instance, if you were denied coverage for having proteinuria or protein in the urine and the cause is extreme physical exercise. You can follow up with an exam from your primary care physician. Ask your doctor to write a letter and attach the test results to show otherwise.
WHAT ARE YOUR OPTIONS FOR LIFE INSURANCE COVERAGE
If you’ve been declined for life insurance coverage, here are your options:
#1. Apply with a different company
Don’t let a previous decline prevent you from getting life insurance. If Company A has declined you, it doesn’t mean that Company B will reject your application. Different companies have different underwriting criteria. The secret is, knowing the companies that look at your condition favorably.
Working with an independent life insurance agency like Funeral Funds that has access to high-risk life insurance companies can get you approved for life insurance. We work with multiple life insurance companies, and we understand which one will give you the best chance of approval.
#2. Try No-exam Policies
If your health issue is not under control and you’re not compliant with your doctor’s recommendation, you’ll have to opt for a no-exam policy. No exam policy would be one of your best options if you were denied for life insurance in the past
Simplified Issue Life Insurance
Simplified issue policies don’t require a medical exam. You only need to answer a series of health questions. These health questions are very lenient and accepting many health conditions.
Simplified issue life insurance has a level death benefit. If you were approved for this type of policy, you are immediately covered from the first day. Your beneficiaries will receive 100% of your death benefit when you pass away for whatever reason.
Graded Death Benefit Policy
If you don’t qualify for simplified issue life insurance, a graded death benefit is your next best option. Graded death benefit has a two to a three-year waiting period before the death benefit kicks in.
During the waiting period, if you suddenly pass away – the life insurance company would only refund your premiums plus interest, or they would give a percentage of your death benefit.
If you pass away during the first year, the company will pay your beneficiary 40% of the death benefit. If you die in the second year, the death benefit payout will 70%. After the waiting period, your beneficiary would receive 100% of the death benefit.
Guaranteed Issue Life Insurance
Guaranteed issue burial insurance is your last option to purchase life insurance coverage. Guaranteed issue final expense insurance does not have a medical exam, and you don’t have to answer health questions either.
Guaranteed acceptance life insurance may be your best option if you have a severe medical condition. Your approval is secured regardless of your medical condition. If you are a U.S citizen and you fall under the age requirement, you can qualify for this policy.
This type of policy works just like a graded death benefit policy. It has a two year waiting period before you are fully covered for the natural cause of death.
If you die within the waiting period, your beneficiary will only receive the return of premium plus interest which is commonly 10%. But, if you die due to an accident 100% of the death benefit will be available to your beneficiaries.
GETTING APPROVED FOR AFFORDABLE LIFE INSURANCE
Aside from working with an independent life insurance agency to help you get approved for coverage, there are a couple of things you can do to get affordable life insurance and increase your chances of getting covered.
You could lower your life insurance premium if you:
- Quit using tobacco products – non-smokers have lower rates compared with smokers. Smokers pay up to three times the rate of a non-smoker.
- Lose weight – losing weight often mean lower blood pressure and cholesterol levels, and you decrease your chances of developing chronic diseases.
- Reduce alcohol intake – drinking less alcohol or completely stopping will make less of a risk to the insurer and therefore they will give you lower premiums.
- Improve your driving – DWI’s or DUI’s can cause life insurance companies to give you a higher rating or decline your application.
- Switching insurers – you may be able to get better rates if you switch to another life insurance company that offer the same benefits with lower rates.
WHAT’S YOUR NEXT STEP IF YOU’VE BEEN DECLINED FOR LIFE
Life insurance companies will know if you applied with other companies and if you had an application had been denied in the past. Record of approval and denials are recorded in your Medical Information Bureau.
Life insurance companies don’t like many declines, and it could hurt your future chances with a company willing to take your risk.
If you’ve been declined for life insurance coverage in the past for whatever reason, then give us a call.
You may be frustrated with being declined for coverage, but remember you have options. We will help you find the life insurance company that will take your risk and offer you coverage.
HOW CAN FUNERAL FUNDS HELP ME?
Trying to find a policy with a history of decline needn’t be a frustrating process; working with an independent agency like Funeral Funds will make the process easier and quicker.
If you have been declined for life insurance, let us help you; we will work with you side by side to find a plan that fits your needs.
We will work with you every step of the way to find the plan that fits your financial requirements and budget. You don’t have to waste your precious time anymore searching for multiple insurance companies because we will do the dirty work for you.
We will shop your case to different insurance carriers and get you the best price.
We work with many A+ rated insurance carriers that specialized in covering high-risk clients like you. We will search all those companies to get the best rate. We will match you up with the best burial insurance company that gives the best rate.
We will assist you in securing the coverage you need at a rate you can afford. So, if you are looking for funeral insurance, or burial insurance, or life insurance, we can help.
Fill out our quote form on this page or call us at (888) 862-9456 and we can give you an accurate quote.