Taking out a life insurance policy is the responsible thing to do. It protects your family from financial burdens after your death. However, you may find yourself being denied by the life insurance provider. This can be discouraging and make you feel anxious about your future.
Luckily, you can take steps to increase your chances of securing a life insurance plan. This includes understanding why you were denied coverage and exploring alternative insurance plans.
What are the Reasons People get Denied Life Insurance?
The most common reason for denying your life insurance application is being considered a higher-risk individual. Underlying health conditions such as obesity, heart issues, diabetes, or other serious issues can prevent you from getting coverage approved.
You’ll undergo a required life insurance medical exam during your application process. The exam includes sharing your medical records and a list of any medications you take for current or past conditions. You also need to provide contact information for all doctors you’ve visited in the past five years.
Those applying for life insurance may be unaware they have a medical condition that raises a red flag for insurers. This may include high blood pressure, high cholesterol, or having pre-diabetes.
Other than health issues, a history of risky behavior as evidenced by a criminal record, speeding tickets, or a DUI can work against you in your effort to secure life insurance coverage.
Ask the Company for More Information
If you receive a rejection letter, you need to determine why you were denied. Contacting the insurance agent and asking for more information is the first step.
Understanding why you were denied allows you to focus on the problem. You may be able to correct high-risk behaviors or treat an unknown medical condition for a better chance of approval in the future.
Check for Errors
Once you know the reason for your denial, you can fact-check the insurance company’s decision for errors. The provider may be basing their verdict on insufficient or incorrect data. If this is the case, you can appeal the decision by having your doctor send updated information to the life insurance company.
You can also appeal your denial for non-medical reasons. Out-of-date information that puts you in a high-risk category qualifies for appeal. This includes your past driving offenses, hobbies, employment, and finances.
Explore Other Options
If your denial still stands after double-checking your case and submitting an appeal, you need to explore other options. Start with your workplace, since your employer may offer group life insurance you can apply for as an employee.
While a group plan may not offer as much coverage as you were hoping for, you can secure a death benefit while putting yourself in a position to get an individual plan in the future.
Simplified Issue or Guaranteed Issue Policies
You can find a life insurance company that doesn’t require a medical exam for coverage. Simplified issue and guaranteed issue life insurance plans will base your approval on your medical history and lifestyle questionnaires. These plans offer life insurance for those who would typically be denied coverage. This includes older individuals and those with serious underlying health conditions.
Look for companies that offer immediate coverage without long waiting periods and online quotes that provide the amount of coverage you desire. Consult an insurance agent you trust to get advice on which of these alternative plans is best for you.
Contact a Life Insurance Agent
Don’t hesitate to work with an expert to help you navigate the tricky minefield of traditional life insurance. Independent insurance agents know the ropes and can propose viable solutions you wouldn’t come up with on your own.
An insurance agent knows everything about the underwriting process. They offer valuable information regarding why a life insurance application might be denied and what you can do to maximize your chances of approval.
Use Time in Your Favor
If you can’t change the insurance provider’s mind, you may be able to make changes in your life to remove yourself from being considered high-risk. If your denial was based on a health condition or bad habit, taking corrective action may help your chances of approval in the future.
Regular exercise and eating a healthier diet may help you lose weight and improve your blood work. If you’re a heavy drinker, drug user, or smoker, consider cutting back or quitting to improve your health and a chance for life insurance approval.
Avoid Anxiety Over Life Insurance Denial
Being denied life insurance after a thorough application process is stressful. You may worry about how you’re going to protect your family in the future. Reduce your anxiety by exploring the options available to you. You may be able to overturn your denial or pursue an alternative life insurance plan.
Get help from experts in the field. Finance is us offers insurance tips to help you understand your options for life insurance, car insurance, and more. We have everything you need to make an informed choice.
Disclaimer: All content on this site is information of a general nature and does not address the circumstances of any particular entity or individual, nor is the information a substitute for professional financial advice and services.
