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What To Do If Your Life Insurance Application Is Declined

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Life insurance provides priceless peace of mind and protection for your family, so getting declined for coverage can be a devastating feeling.

While a rejected life insurance application is disappointing, there’s no need to give up hope.

With a little determination and the info below in hand, you can apply again, and walk away with the coverage you need.

What To Do If Your Life Insurance Application Is Declined

If your life insurance application is denied, here are the steps you need to take to get accepted:

  1. Gather the data: Find the documents that explain precisely why the insurance provider declined your application.
  2. Verify the information: Errors happen. Double-check the information the underwriter used and make sure to find and correct any mistakes.
  3. Contact a life insurance agent: They can help you understand what you need to do to get your next application approved or suggest alternatives.

If a carrier does not approve your application, they see you as a risk due to your health and other factors.

Below, we’ll dig deeper into the reasons your life insurance application could be denied and help you find a solution if it is.

10 Reasons Your Life Insurance Application Was Denied

1. Obesity

The insurance industry views obesity as a risk because of the countless potential health complications it can lead to, like heart disease, high blood pressure, sleep apnea, osteoarthritis, and some cancers.

While the BMI is a crude indicator of health, many insurance companies still use it to determine overall obesity.

If you are denied life insurance due to obesity, shedding pounds and maintaining a healthy weight are the best ways to get accepted.

You could also apply with a company which is more lenient towards overweight applicants.

2. Age

The older you get, the more challenging it is to secure coverage.

As you age, your odds of incurring an illness or death increases, making you riskier to insure. Premiums are also significantly more expensive over time.

If your application is denied due to age, you may be able to get covered by a company with higher age limits.

Depending on how old you are, you may only be able to obtain a final expense or other guaranteed policy.

3. Chronic Illness

Many insurance providers deny an application if the person is currently dealing with a chronic illness.

Each insurance provider has distinct guidelines when it comes to weighing whether to accept individuals with chronic illness.

Some of these chronic illnesses include cancer, Parkinson’s disease, Alzheimer’s disease, HIV or AIDS.

If you are working to treat the disease or have a physician’s statement, those factors can go a long way towards improving your odds of success.

4. History of Illness

Many people have minor health complications passed down through their families, such as:

If you have an increased risk for chronic illnesses, like cancer, the carrier will weight those conditions more heavily.

Some companies judge family health history less stringently than others, so consider applying with a company who’s underwriting is less strict

Reducing the risk factors you can control as much as possible can also help you to get coverage with a negative family health history.

5. Alcoholism

When the occasional drink becomes a regular one or a reoccurring problem, it can be solid grounds for life insurance denial.

Alcoholism can inflict lasting damage on the body in the form of anemia, brain and nervous system problems, gout, and heart disease.

Perhaps most importantly, is the impact alcohol has on the liver. Currently, the definition of heavy drinking is about 15 drinks a week for men, or 8 for women.

If you’re denied due to drinking, cutting back your alcohol consumption can help you get approved.

6. Hazardous Occupations and Hobbies

While many of us operate in the safe confines of an office, professions like the ones below dabble with a bit more risk:

  • Airline pilots
  • Fishermen
  • Roofers
  • Lumberjacks
  • Truck drivers
  • Police officers
  • Ironworkers
  • Farmers, ranchers, or cattle herders
  • Construction workers

If you have one of the jobs above, or a hobby like skydiving, bungee jumping, or scuba diving, you’ll have a hard time finding coverage.

7. Drug Use

Many carriers view pervasive drug use as a significant liability for costs down the road.

All drugs are not equal when it comes to measuring risk, however.

While marijuana is not legal in all 50 states, the drug has a wide range of medicinal benefits which may even improve the odds of your application’s approval.

Addiction to opioids, alcohol, amphetamines, or prescription drugs will have the opposite effect, though.

8. Blood or Protein in the Urine

The presence of blood or protein in the urine stream can be a sign of health problems, most frequently kidney problems.

Other potential causes include extreme physical exercise, like ultra-marathons.

If you find blood or protein in your urine, it is essential to follow up with your primary health care provider.

Additional information can provide insight on how to treat the complication as well as the cause.

Extra data can also help combat the negative perception of the diagnosis for your next application.

9. Financial Reasons

During the application process, an insurance provider will see your current income and net worth.

Some providers will limit applications if the household income is below a certain threshold.

Life insurers will consider your financial well-being to assess your ability to make payments on time and to gauge total income replacement.

Being financially stable and having a dependable income that matches the amount of coverage you apply for can help you next time you apply.

10. Previous Denial

Sometimes a denial from a previous carrier is enough to raise a red flag for a new underwriter.

One rejection is not a guarantee for future denial, though.

If you overcome an illness that led to rejection, for example, you might have an easier time getting approved on a second application.

If you receive consistent rejections and don’t know why, you can credit it to the Medical Information Bureau.

Insurance providers subscribe to the organization to see information about previous approvals or denials, receiving alerts about potential risks that might otherwise go unnoticed.

Alternatives To Explore After Your First Application Is Denied

declined for life insuranceIf you’re unlikely to get traditional coverage no matter how many times you apply, there’s still hope.

Fortunately, there are several alternatives to traditional life insurance.

They include simplified-issue, guaranteed-issue, final-expense, and group life insurance.

Here’s a quick overview of each:

  • Simplified-issue life insurance: This policy allows you to skip the medical exam altogether. It could provide similar levels of coverage to regular life insurance, though the overall costs are typically higher due to the nature of the plan.
  • Guaranteed-issue life insurance: This option not only skips the medical exam but also excludes the underwriting process entirely. While it does offer flexible coverage, the premiums are expensive, and the death benefits are relatively small.
  • Final-expense life insurance: Final expense policies cover expenses related to funerals and other end-of-life costs. They work similarly to burial or cremation insurance coverage and come with lower face amounts.
  • Group life insurance: This product can be acquired easily through your employer. It provides benefits packages with some life insurance coverage to compensate for a few specific medical conditions and occupational hazards. The premiums are relatively low because the coverage is not as comprehensive.

Final Thoughts

When your life insurance application is denied, it isn’t the end of the world.

Taking the time to explore the company’s reason for denying your application can provide you with crucial insight.

Whether you have to correct an error, lower your risk factors, or partner with a more reasonable underwriter, there’s a good chance you can still get traditional coverage.

If not, consider one of the alternatives above.

As a last resort, ask your employer about a group life insurance product to cover you and your loved ones for guaranteed peace of mind.

Don’t give up on finding a policy to protect what matters most!

Author:

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Jason Fisher

Jason Fisher is the founder and CEO of BestLifeRates.org, LLC. and a multi-state licensed life insurance agent who has helped over a million Americans seek out affordable coverage, compare quotes, or get their family and businesses covered.

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