Being denied anything is frustrating and disappointing. Being denied something as important as protecting your family, your home, or your business with a life insurance policy can be anxiety-producing.
People can be denied life insurance for both medical and non-medical reasons. Health issues like diabetes, obesity, or the previous diagnosis of a serious disease can be problematic when you’re applying for life insurance. You can also be denied for non-health reasons.
For example, engaging in risky hobbies like skydiving or having a history of DUIs or speeding violations can prevent you from being insured. Dangerous jobs, criminal records, failed drug tests, and even a sketchy financial history can be reasons to refuse your request for life insurance.
The good news is that The American Council of Life Insurers (ACLI) states that there are fewer than 1 in 200 claims denied. If you have been one of that small number, you do have options. The experienced agents at YourPolicy are experts at guiding you through this type of situation and helping you find the right insurance solution to fit your needs.
What To Do If You’re Denied Life Insurance
Reach Out to Your Insurance Agent
Your insurance agent is a lifesaver at a time like this. YourPolicy agents know the underwriting process and will look for any red flags on your application. It’s worth mentioning that being denied by one company doesn’t mean that you’ll be denied by every company.
Whatever you do, don’t try to go through this process alone. Our agents have access to over 100 carriers and will provide you with the right advice and information to help you make an informed decision on your next move.
Appeal The Decision
After you’ve spoken with your agent, you can review the facts and be sure that they are correct. If you were denied based on incorrect medical information, you can appeal the decision. Ask your doctor to provide the insurance company with up-to-date information from your medical file. Nonmedical reasons can also be appealed. Incorrect details about your job or hobby, outdated financial records, or a lapsed driving offense can mistakenly place you in a high-risk category.
Contact Your Employer
Your workplace may offer a group term life insurance plan that is bundled with your employee benefits. It won’t provide a high coverage limit, but it will offer a death benefit until you can get your own term policy. The coverage is typically capped at $50,000 or a percentage of your income, and these plans don’t require a medical exam. It can be expensive; but, If you really need the additional coverage, you can supplement this plan. It’s important to realize that if you leave your position, you’re no longer covered.
Explore Other Forms of Coverage
It’s worth exploring different types of coverage. Non-medical exam options are available. You’ll still be asked medical questions, but these plans will offer something even if you’re uninsurable. In the long run, that’s better than having no coverage at all, but be sure to discuss any major decisions with your insurance agent.
- Simplified Issue Life Insurance – These policies don’t require a medical exam, but you must complete a medical questionnaire along with your application. There is typically a high approval rate, but, if you do have serious medical conditions, you may not get this coverage. The downsides to this type of policy are a low coverage limit and a higher cost than conventional life insurance.
- Guaranteed Issue Life Insurance – If you’re older, or have a serious medical condition, guaranteed issue life insurance allows you to skip both the medical exam and the medical questionnaire. Coverage is guaranteed, but the payout is usually only up to $50,000. Some of these policies have a waiting period of several years before beneficiaries will receive a full payout. As with simplified issue life insurance, this coverage costs more than traditional life insurance plans.
- Mortgage Life Insurance – Depending on the type of mortgage loan, many lenders require mortgage insurance to lower their risk. However, you can apply for a policy within a specific timeframe even if your loan doesn’t require this type of insurance. You will have to answer health questions, but this can work if you’ve been denied life insurance and don’t have any serious health conditions. If you’re refinancing your mortgage, you can get mortgage insurance without answering any questions.
The bottom line with these types of policies is that they will cost more than traditional insurance and the payout may not be as high as you desire, but they are worth considering if you’re out of options.
If All Else Fails, Play the Waiting Game
In today’s instant gratification landscape it’s difficult to play the waiting game, but patience can prevail in your search for the right life insurance. This can be your opportunity to be proactive in correcting health and financial issues. Improving your diet and not smoking may lower your weight, cholesterol, and blood pressure. Sort out any financial or other non-medical issues that are keeping you from getting approved for life insurance. Maybe it’s time to ditch sky diving as your favorite pastime. Be proactive with small changes, and you’ll be in a better position the next time you apply for life insurance.
Being denied a life insurance policy doesn’t mean you are at the end of the road in your search. Discuss this decision with your agent, appeal the denial, and explore other insurance options. This setback can motivate you to improve your physical and financial health, putting you in a better place the next time you apply.