Life Insurance Decline: reasons why life insurance is denied

life insurance decline
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    Did you happen to receive a life insurance decline? Perhaps you had a minor or major risk that you weren’t aware of that caused your application to be declined? Or maybe you didn’t apply with the best life insurance companies for your risk? In this article, we’re going to go over what to do next and provide you all of your options.

    Life Insurance Decline

    When you’re denied for insurance, many thoughts can run through your brain.

    • What can you do now?
    • What do they think is going to happen?
    • Why was I declined, because I’m not going to live forever?

    Being declined can feel like a slap in the face – whether it’s for a life insurance policy or the best life insurance policy the company has when you feel you deserve it.

    My Life Insurance Application Was Denied- What Now?

    What generally happens after a time like this is shock and worry. After that, you start wondering what you can do to get approved for life insurance.   How can you let your family know that you’ve been denied and are working to get some kind of life insurance policy?

    Believe it or not, you may be denied coverage for one company, but another is out there for you. Of course, you want to know why life insurance companies decline coverage and how to do two things:

    • Avoid the decline
    • Address the problem

    Why was I denied life insurance?

    What you need to understand is that a big blame for denials is the industry. Simply put, most agents do not have the proper training for field underwriting – which means to research a case to provide accurate quotes, approving or denying an application.

    denied for life insuranceMost agents don’t even know the underwriting guidelines of one company – just consider if they have several to choose from.

    Most agents don’t represent more than one company. So they won’t be able to shop around for the best rate available. It’s a difficult process to navigate, and you’re likely to choose the wrong agent for your needs. You’ll end up applying for a policy that isn’t the best fit for you.

    What Leads A Company To Decline A Person Life Insurance?

    To understand how insurers choose their approvals and denials, you need first to realize that they don’t work from the same underwriting guidelines.

    In fact, each company has unique guidelines it follows – to balance out the risk pool it has. An example is where one company denies a person insurance based on the mere mention of diabetes, another will approve the policy.

    An application being denied is really based on your health or mortality; it’s about the company’s philosophy and their risk tolerance.

    Before your application is submitted to any company, the insurance agent needs to know if the company they opt for is going to decline based on your medical history – breast cancer, type 2 diabetes, etc. Your lifestyle also is taken into account. Do you have a clean driving record? Do you have any risks in your hobbies or have a dangerous job?

    Use an Independent Agent if You’ve Been Denied Life Insurance Coverage

    Believe it or not, it’s fairly common for people denied for life insurance coverage. It’s not the exception, but what is the exception is finding an independent life insurance agent or agency that will do everything possible to ensure two things.

    1. You get approved.
    2. You don’t pay more than you have to for your coverage.

    Independent Life Insurance AgentThis means the agent will heavily research the market and really shop for your coverage. Instead of just offering you a policy that looks good but really isn’t, the agent will look deep and hard to find the best policy you can get.

    Even if the application is turned down for a particular coverage, your agent should continue to shop your case using any new facts. The second application tends to go faster because all of the medical records, labs and exams have been submitted previously.

    You want an agent that will work hard to ensure denials become approvals at the lowest possible rate.

    Therefore, before you start worrying, you need to look at the rejection letter the provider sent. The life insurance denial letter should provide you the following details:

    • Why did the decline the application?
    • It may be blamed on the particular life insurance company and not exactly you.
    • For example, some insurance companies such as Allstate and State Farm follow strict underwriting guidelines.

    This means a person may be considered High Risk with some life insurance companies, even when they’re really not.

    Use a High Risk Life Insurance Agent

    If you’re deemed “High Risk” or you’re searching for a life insurance policy with a pre-existing condition, it’s best to go for companies that don’t have strict guidelines. You need to use an independent agent to handle the application process.

    However, life insurance agents are also not equal.

    Some claim to work in the “high risk life insurance” field but overlook certain types of high-risk conditions such as a person with diabetes or smoker or ex-smoker, etc. You want a broker that will break through the red tape and find you affordable coverage.

    Tip: High risk doesn’t always correlate to your health.

    It could be the profession you’ve chosen. For example, many service members and security contractors were denied or subjected to higher premiums because of the wars in Iraq and Afghanistan. That’s because the insurance companies didn’t want to take the risk. That’s why you need to know the industry, especially if you have a case where you fall into a high-risk category.

    If you are employed overseas in a dangerous location, this would be the ideal time for you to look for an independent agent. They will help you to find and have an affordable life insurance policy even if you’re high risk.

    How To Find A Reputable, Knowledgeable and Experienced Life Insurance Agent

    If you work with the wrong kind of insurance agent, you won’t get the results you want.

    Of course, you may be wondering how you know if an agent is right for you or not. How can you know if they’re sending you to the right insurance companies?   It may seem like an overwhelming process to filter out the good from the bad agents, but it can be done.

    They Ask You The Right Questions

    You’ve talked to your doctor about your medical conditions, and you want the insurance agent you’re talking to to also understand that condition.

    You want them to be asking you relevant questions, and if they ask one you don’t have an answer for, they should tell you why it’s important. If they’re not asking you questions, then they may not be the right agent for you. Agents will need to know what goes into the underwriter’s judgment.

    An independent insurance agent is unlike traditional insurance agents. They work with multiple well-known life insurance companies to give you the best rates around. Think of them as a “life insurance declined specialist”. It’s important to work with one that knows what insurance companies are looking for.

    They Give You Detailed Quotes After The Details

    Avoid agents that provide you quotes despite the serious conditions you have.

    The majority of agents can provide quotes for conditions like hypertension, family history or high cholesterol. However, if you have heart disease, diabetes, cancer or depression, you don’t want an agent to give you a quote until the underwriter(s) provides them with all the information they need.

    Since each company isn’t the same, you could see significantly different rates. An experienced independent agent can work with various companies to find a plan that’s beneficial to you and affordable.

    How Does An Agent Help You Get Approved For A Life Insurance Policy?

    Your chosen insurance agent will likely send out an email or letter to various companies to find a policy that fits your budget and needs. It may look a little like this:

    Client is a Non Smoking Male, DOB is 1/8/79, non-drinker, diagnosed with Malignant Skin Cancer 10 years ago. Surgery removed cancer and client sees his Dermatologist every 6 months. No reoccurrence. Current health is unremarkable; No other health conditions with good family history.  Wants a $1 Million life insurance policy.

    This email, which should be doubled checked before sent off, is likely to be emailed or mailed to various companies with the best underwriting policies for cancer conditions. Your agent is likely to get back several rate quotes provided all the facts are true. Your agent should give you at least two or three of the best quotes.

    Steps are taken to ensure that the life insurance company cannot back out of a quote unless some important data comes to light that wasn’t initially noted before.

    You want an agent that will be willing to go to bat for you. You want them to find underwriters that can provide you with the best quotes and explain to you why they chose that particular company.

    Do this, and the chances of having a life insurance policy you can “live with” are high.

    Declined Life Insurance Options

    What if you’re denied again and again for life insurance? If you’ve been denied over and over for life insurance, you still have some options at your disposal.

    Believe it or not, there are two kinds of life insurance categories that people don’t know about it.

    These categories –

    • Simplified Issue Graded Life Insurance
    • Guaranteed Issue Graded Life Insurance 

    These policies provide flexible underwriting guidelines. These policies are sometimes referred to as final expense life insurance.

    >>RelatedTop 10 Final Expense Companies

    Guaranteed Issue Life Insurance

    With guaranteed issue life insurance, the policy is approved to anyone no matter what their risk is. People are often asked four questions, and an answer of “No” to all means they’re approved for the policy. Bear in mind though this insurance coverage is usually more expensive than a standard life insurance policy because applicants tend to be higher risk.

    Simplified Issue Life Insurance

    Applicants, with this type of policy, are asked a series of questions but can avoid the physical exam. The cost is also higher because most applicants are considered high risk.  On top of that, the provider tends to pay less in coverage upon your death.

    If you want a $2 million life insurance payout when you die, then you don’t want coverage with these policies.

    Another important factor in the two plans is the “Graded” portion.

    No insurance company wants to write a full policy payout if the holder dies the next day or week. The life insurance companies provide these policies with a typical 2 year graded benefit. That means that for the 1st two years, the payout will total the amount of the paid monthly payments along with interest. Once the 2 years have passed, the full death benefit will become active.

    They also have a conservative upward limit on the amount of insurance approved. Most of these policies are approved for less than $100,000, and the only way to get more than that is to apply and pay for multiple life insurance policies.

    >>Related Article: Life Insurance Types

    Should You Get An Accidental Death Benefit Life Insurance Policy?

    Another kind of policy to consider is the Accidental Death Benefit Policy. It pays when the death is the result of an injury or accident.

    They don’t relate to a person’s health, and there are no health-related qualifications. If your standard life insurance policy doesn’t address the accidental part or you want additional coverage beyond the graded policy, this may be a suitable option.

    On top of that, the accidental death benefit life insurance tends to cost less than traditional policies.

    Top 21 Reasons Why Life Insurance Claims Are Denied

    There are many reasons why you may can be declined life insurance. Some are more obvious than others. Let’s look into the Top 21 reasons to be denied life insurance.

    1. Stroke

    Insurers tend to look at the kind of stroke (minor or major) stroke a person has had.  If you’ve had a stroke, the company may wait to approve or deny you coverage until you can show them a stable period of no strokes.

    2. Overweight/Obese  

    Many companies red flag applications where the person is overweight or obese due to the multiple health problems that come with the excess weight. For example, a person may suffer from various cardiovascular problems. They also tend to look at the height-to-weight ratio (also known as the flawed BMI) when considering coverage. While you may not be denied coverage, you may be subjected to higher premiums. If the weight is associated with other health problems, you’re likely to be denied coverage.

    3. Diabetes

    Life insurance is still possible with diabetes, especially if there are no other health problems like a smoking habit, alcohol abuse, overweight, etc. If you have uncontrollable diabetes, on the other hand, you may find it more difficult to be approved for a policy. It’s always a good idea to talk with an experienced agent.

    4. Kidney Disease

    Any kidney-related condition – kidney stones, renal insufficiency, proteinuria and glomerulonephritis – can affect your ability to get covered. The company may look at how long you’ve had it, what stage the disease is in, what kind of life insurance policy you want, etc. Most kidney disease conditions can be insured, but you should work with a life insurance agent that understands this area before submitting applications.

    5. Heart Disease

    Even if you have heart disease, you can still get coverage. Yes, there may be a minute number of companies who would underwrite you’re a policy, but they are out there.

    6. Liver Disease

    There are several kinds of diseases like cirrhosis or hepatitis, gallstones, etc. Any of these can affect the approval of an application. While most people with kidney diseases are insured, their premiums tend to be higher. Of course, that’s dependent upon the provider and the individual’s circumstances.

    7. Other Diseases

    When it comes to other diseases, companies may pick and choose who they decide to underwrite and who they don’t. Make sure to talk with an agent who understands the ins and outs of your particular condition. They can come up with products that will ensure you’re covered.

    8. Cancer

    Most companies see cancer as “high risk.” The kind of cancer you have, its stage and grade will determine if your application is approved or denied. In this situation, it’s best to find an agent who can help you find the right company for your policy needs.

    9. Unstable Blood Pressure

    A company may decline applications based on out of control blood pressure. If you do have high blood pressure that medications can control, some companies may be more inclined to approve your application.

    10. Multiple Sclerosis

    This disease causes damage to the nerve cells in both the spinal cord and brain. Multiple Sclerosis may cause the nerves to deteriorate and cannot be reversed. Many companies don’t provide coverage for a person with this condition, but there are still some that do.

    11. Amyotrophic Lateral Sclerosis (ALS)

    This disease is also known by Lou Gehrig’s disease and is a progressive neurodegenerative disease that will affect the nerve cells in both the spinal cord and brain. All companies deem a person with Lou Gehrig’s disease to be high risk.

    12. Parkinson’s Disease

    Parkinson’s Disease is a progressive nervous system condition. It affects many areas of the brain including the one that controls movement and balance. The condition leads to shaking and tremors even when the body is resting.  In the early stages of the disease, your condition is insurable. As the disease progresses, it gets harder to attain coverage. However, there are products designed for cases like this.

    13. Lupus

    This disease causes the body’s immune system to become hyperactive and attack itself. Lupus causes inflammation, damage to heart, lungs, skin and kidneys. It can also lead to swelling. If you need protection and have lupus, the company will look at the kind of lupus you have, your current health condition and various other factors.

    14. HIV/AIDS

    Not too long ago, anybody diagnosed with HIV/AIDS had a much harder time getting coverage, but times have changed thanks to the plethora of medications offered to extend life expectancies for those with the condition.

    15. Alcohol Use

    If your liver function is elevated, it could mean damage to your liver cells. The cells may leak chemicals into your bloodstream. For the most part, the elevation is minor and temporary. But, there are instances where the indication is far more serious, and this is concerning for the life insurance company. If you drink regularly, heavily or abuse alcohol, you may have higher than normal premiums or your application is denied.

    If you want coverage, you may want to stop drinking at least a year before applying for a policy.

    16. Drug Use

    Life insurance companies will turn down any application where there is a notable drug use history. For you to be approved, you need to show several years of not using drugs.

    17. Risky Recreational Activities/Sports

    If you like to skydive or rock climb, it can make a life insurance company nervous. Therefore, you need to look at each company before submitting an application. There are a number of companies that specialize in high-risk policies to include these kinds of activities.

    18. Dangerous Occupation

    Some jobs are certainly more hazardous than others, and an application could be denied based on the kind of job you have. What are some of the common dangerous jobs that companies will deny coverage for? They include police officer, offshore diver, bomb squad team member, offshore drilling platform worker, firefighter, etc.

    19. DUI/Dangerous Driving Habits

    If you drive carelessly or you have had a DUI, you may find you’re denied coverage or have your current policy canceled. You may also be subjected to higher premiums. It’s imperative to have good driving habits to avoid the risk to yours and others’ lives.

    20. Foreign Travel

    If you plan to travel to an area of the world where it’s deemed unstable or dangerous, you may find that your policy is canceled or declined. The company may also include a trip exclusion policy. They may also wait until you return for the policy to take effect. Every insurance company has their own look at what is and is not seen as dangerous.

    21. Income Limitations

    Many companies decide whether or not to approve someone based on their income. The level varies from one company to the next. Why do they make this restriction?  They may decline a policy because the company needs some justification for it. If you’d like to have a $5 million policy, but only make $30,000 a year, chances are you’re going to be denied.

    2 Key Ways To Know How Much Coverage You Really Need

    When it comes to coverage, it’s important you know how much coverage you really need. Several factors can affect the amount, but the two key ones are:

    Debts/Final Expenses

    Before you apply for a policy, you need to consider your debts and the final expenses your loved ones would be left responsible for when you die. The idea is to leave your family money that addresses all this as well as the funeral arrangements.  Make sure the money is enough to pay off a car loan, mortgage, student loan or any debt you have.


    Another issue to consider is your salary. Will the money cover the loss of your salary? If you’re the primary breadwinner in the home, you don’t want your family to struggle in paying bills.  A policy should be enough to cover that income loss without having to give up their living standards.

    What You Need To Know about Life Insurance Declines

    Nearly everybody with risks can get declined for coverage, which is why they come to a high risk independent agent to help them out.

    While some denials are legit, others are not. You need options and your agent should be willing to work hard for you. They need to find you a company that will underwrite policy for you.  Sometimes, it’s a matter of waiting six to 12 months to look again at a company that previously turned down an applicant. Perhaps their policies change, or a new underwriter was hired.

    The key thing is not to give up hope. You can find a policy to protect your loved ones when you do die.

    At LIB, we’d be happy to help you apply for the 1st time or help you if you’ve already been denied. We’re experts in finding the best companies you can qualify with. With access to dozens of top rated companies, we’ll work to find the ones that will approve your case.

    Thank you for reading our post, Life Insurance Declines. Please leave a comment or question below.

    Michael Quinn

    Michael Quinn

    Michael is a licensed life insurance agent, expert & owner of Life Insurance Blog. LIB has helped thousands of shoppers understand life insurance and secure affordable coverage.

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