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Have you been declined for life insurance?
Life insurance can help protect your family and loved ones from any financial burden should something happen to you. Unfortunately, not everyone who applies for life insurance will be approved.
In this post, you’ll find out:
- Reasons why you may be denied life insurance coverage
- What you can do after a decline
- Which insurance companies can still provide you coverage after a declined application
So if you need to know your options after a decline, you’re in the right place.
Why Your Life Insurance Application Was Declined
Underwriting is when the insurance company assesses your risk for life insurance. During underwriting, if a life insurer determines that your mortality risk is too high—even if it were to charge you higher premiums—it will turn down your application. These are the nine most common reasons why you’re not approved for a life insurance policy.
1. Medical issues
The list below is not exhaustive. These are some of the more common illnesses that can lead to a decline. If you have one of these pre-existing conditions, the underwriter will want to know complete details before making a decision.
Cancer: Because there are many types of cancer, there are also many possible outcomes. Declines are higher for more advanced stages of cancer.
Heart disease: While mild or moderate heart attacks may lead to higher rates, severe ones will result in an outright decline.
Diabetes: You’re not as likely to be denied life insurance because of diabetes as you are for critical illness or disability insurance. Granted, if you have other complications because of diabetes, then your chance of rejection goes up.
Cholesterol: The good news is that you can still get life insurance if you have high cholesterol. That is unless your total cholesterol / HDL ratio is exceptionally high. Having vascular diseases or other health issues (e.g., smoking, high blood pressure, family history) don’t help your case either.
Kidney disease: Because polycystic kidney disease is inheritable, the insurance company will also want to know your family history. Also, the younger you were when you were diagnosed, the more likely the insurer will decline your application.
Multiple sclerosis: Similar to a heart attack, mild or moderate cases of multiple sclerosis will likely lead to higher rates. Severe cases (EDSS over 5.0) will be declined.
Depression: Depression or anxiety by themselves shouldn’t lead to a rejected life insurance application. However, pair it with attempted suicide, hospitalization, or a history of drug or alcohol abuse, and your chance of denial skyrockets.
2. Hazardous occupation
Not everyone works a low-risk desk job. Some jobs involve more risk than others. Here are some occupations that can lead to a decline:
- Miners
- Deep-sea fishermen
- Electrical power-line installers
- Truck drivers
- Firefighters
- Explosives workers
- Airline pilots
3. Financial reasons
The amount of death benefit that you want to buy has to make sense. If you’re worth more dead than alive, the life insurance company will likely decline your application. That’s why it will consider your income and net worth as it relates to how much coverage you want.
4. Lifestyle choices
Alcohol abuse: While a few drinks per day shouldn’t lead to rejection, a high number (>5) would cause concern for the insurance company. Couple that with drug use or a poor driving record, and you will have a hard time getting a traditional life insurance policy.
Drug abuse: If it’s been a long time since you’ve used an illicit drug, you may still be able to get life insurance. Your odds of rejection increase if you’ve used it within the past few years and you have a history of relapse.
Dangerous sports and hobbies: While some life insurance providers may offer you a policy with an exclusion for the dangerous activity, some will decline you outright depending on how risky it views the activity. Many life insurance companies find the following sports high-risk:
- Skydiving
- Rock climbing
- Motorized vehicle racing
- Scuba diving
- Backcountry skiing
5. Lab results
As part of the underwriting process, you may have to undergo a medical exam to show your good health. Although medical exams are becoming rarer because of advanced underwriting techniques, the insurance company can still request one if you have a medical condition.
The blood pressure reading, blood sample, and urine sample from the test results will show how well you are managing a chronic illness.
As for the cost, the life insurance company pays for the medical exams, so you don’t have to worry about any extra fees.
6. Driving record
On the life insurance application, it will ask if you’ve had any moving violations, license suspensions, or DUIs in the recent past. The more of these you’ve had, the higher the likelihood of a life insurance rejection.
7. Criminal record
When applying for life insurance, the best-case scenario will be minor infractions that do not involve violence, major theft, or jail time. If you:
- Have a pending criminal charge,
- Are on parole or probation, or
- Have committed violent crimes or repeat offenses,
The life insurance company will likely decline your application.
8. Foreign travel
If you declare that you have traveled or will travel to a high-risk country within the next 12 months, you have to fill out a foreign travel questionnaire. It asks about the countries you will visit, the duration, frequency, and purpose of travel.
Planning to travel to a country listed on the government of Canada’s travel advisory website to avoid all travel? Prepare for denied coverage.
9. Obesity
If the underwriter determines that your body mass index is too high, it will decline your life insurance application. Your chance of rejection increases if you have other chronic illnesses associated with obesity, such as diabetes or heart disease.
What Can You Do If You're Denied Life Insurance?
Stay calm. Declined applications are not the end of the world. In fact, many Canadians are declined life insurance. Here are some ways you can manage the decision.
Find out why you were declined
First of all, it’s well within your right to find out the reason for the rejection. Is it due to your health or lifestyle? Or was there a mistake in the lab results or your personal information?
The insurer will send your test results to your family doctor so you can discuss ways to improve your health with medical professionals.
Appeal the decision
If there was a mistake in the medical exam, ask the insurance company to reassess your application. Or, if you don’t think your situation is as bad as they make it out to be, try to present your case to the underwriter.
Explain how you’re a lower risk than they think and provide some evidence. Who knows—you could get the decision overturned. The good news? Your insurance broker is on your side, so he/she can help you through this process.
Improve your health or lifestyle
If you don’t need life insurance coverage immediately, you can spend the next few months to a year improving your health before you apply again. Now that you know the reason for the decline, you can work specifically on improving that aspect of your life.
The next time you apply again, the life insurance company will be pleased to know that you’ve taken steps to reduce your chance of premature death. It will take that into consideration when deciding whether to approve your life insurance application.
You can increase your odds of approval by getting your insurance broker to write a cover letter explaining how you’re no longer a large risk to the insurer.
Apply for more coverage through your workplace or association
Personal life insurance policies aren’t your only option when you need coverage. You can also see if your employer or association have optional life insurance you can buy. You might not be able to get a significant death benefit, but some coverage is better than no coverage.
Apply for a different life insurance policy
Besides traditional life insurance where underwriting guidelines are strict, you can also apply for life insurance products with looser standards. Called simplified issue life insurance, these are for higher-risk people who have trouble getting insurance the old-fashioned way.
The insurance provider asks fewer health questions with these policies, and you don’t have to undergo a medical exam. On the downside, the premiums are higher to account for the high risk.
Nevertheless, it’s great if you don’t have any other life insurance options and are willing to pay more for coverage.
Which life insurance companies can still offer you coverage?
These days, many insurers offer simplified issue life insurance. For example, Industrial Alliance, Canada Protection Plan, Specialty Life Insurance, are just a few of the names that offer some simplified issue products.
Some insurers have more flexible underwriting than others, so you need to work with an experienced and knowledgeable life insurance advisor to find the insurance provider who is most likely to accept your application. Out of all the insurers out there, at least one company will offer you some type of insurance.
Have You Been Declined For Life Insurance? Contact Us Today For More Options
You deserve the peace of mind of knowing that the insurance payout would take care of your family financially if anything were ever to happen to you. Don’t let one company’s decision stop you from getting the protection that only life insurance offers.
We’ll help guide you through the steps to take next so that we can find an option that will work for you. Whether it’s a term life policy or whole life insurance, we’ll make sure there’s an option out there for everyone—even those who’ve been declined before!
Get Your Life Insurance Quote Now
While we make every effort to keep our site updated, please be aware that timely information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Brian So Insurance and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser. This post is a brief summary for indicative purposes only. It does not include all terms, conditions, limitations, exclusions, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details which can be provided upon request. In case of any discrepancy, the language in the actual policy documents will prevail. A.M. Best financial strength ratings displayed are not a warranty of a company’s financial strength and ability to meet its obligations to policyholders.
3 Comments
Does auto immune disease get you turned down for term insurance
Hi Linda,
Autoimmune disease is not an automatic decline for term insurance. It depends on many factors, like the type of disease, duration since diagnosis, treatment, complications, etc.
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