Help! I’ve Been Denied Life Insurance! What Can I Do Now?

By James O'Neal

26% of Americans have no savings at all. This means that if the primary breadwinner passes away, those families will find it difficult to take care of their financial obligations.

You’re probably already aware of the importance of life insurance. Without it, your family may be faced with financial stress while mourning. But what do you do if you’ve been denied life insurance?

No one wants to have their life insurance application denied, but this is more common than you may think.

However, being denied by your insurance provider doesn’t necessarily mean you’re out of options. Read on to learn what you should do if you’ve been turned down for life insurance.

Denied for Life Insurance: What Now?

Just because you’ve been denied life insurance doesn’t mean you’re out of options. Sure, one company may have denied your application, but there are hundreds of life insurance companies to choose from.

Here are the first steps you should take after you’ve been denied:

Get Educated

Before you’re denied life insurance, the insurance company collects lots of data from a number of sources. They want you as a customer, but they need to evaluate their risk. If you’re seen as a high risk, they may postpone or deny you. If this happens, you have the right to request more information about why you were denied.

The insurance company has to provide you with detailed information about why you were denied. This could be due to your driving record, current exam results, or previous medical history.

Here are some common reasons why you may be denied:

Income Limitations

If your income is below a certain level, you may be denied by some life insurance companies. If you earn $25,000 a year, it’s unlikely that you’d qualify for a policy worth $1,000,000. Usually, you can get coverage for anywhere from 10-30 times your annual income.

If you’ve filed for bankruptcy, you won’t be able to get approved for coverage until at least one year after the proceedings have been discharged.

Hazardous Occupation

If your occupation is considered to be hazardous, many life insurance companies will see you as high risk. If you work in any of these 10 deadliest jobs, there’s a high chance your life insurance application will be denied.

Health issues

There are plenty of health issues that can lead to a life insurance denial letter. If you had protein or blood found in your urine, this could indicate kidney disease. It could also mean you’re just extremely physically active.

Other health issues that could result in denial include:

  • Obesity
  • Elevated triglycerides, lipids, and cholesterol
  • Elevated liver function
  • Alcoholism/drug use
  • History of cancer
  • HIV or AIDS
  • High blood sugar or glucose levels
  • Hepatitis

Often, people don’t realize they have some of the above problems before they get a medical for health insurance. However, the insurance company may be willing to wait for you to get additional medical information before they make a decision.

Previous Declines

When it rains, it pours. It turns out that if you’ve been declined in the past for a life insurance application, you’re likely to be denied again. The Medical Information Bureau allows life insurance companies to share information about both denials and approvals with other companies.

Check Your Results

Mistakes happen. That’s why it’s a good idea to check if the data that was provided to your insurance company is correct.

If you were denied due to a poor exam result, check with your doctor. Sometimes, a company could deny you after you received an undiagnosed lab result- even if there’s no actual problem.

Sure, you could be denied due to any of the reasons listed above. But sometimes, people are denied simply due to human error. That’s why you should always ask for clarification and ensure everyone has the right information.

Talk to an Agent

Even if you’ve carefully researched an insurance company and settled on them for your life insurance, that doesn’t mean they’re the best option. If you’re denied life insurance, you should consult an agent. That’s because they’ll have a wealth of information about which insurance companies could be the best fit based on the reasons you were denied.

Since each life insurance company has its own underwriter with guidelines, an agent can help you find an alternative option.

Shop Around

Most of the time when you’re denied life insurance, you’ll be denied due to a medical issue. However, each life insurance company treats these issues differently. While one company may decline you due to your diabetes, another may accept you- providing that diabetes is under control and you have an otherwise clean bill of health.

That’s why it’s a good idea to look into a number of different life insurance companies when you’re considering purchasing a policy.

Consider Other Options

If you’ve been denied by a few life insurance companies, the next step is to consider alternative options. Check if you have an employer-offered group plan available. This is usually guaranteed issue- meaning you usually can’t be denied due to any pre-existing medical conditions.

Unfortunately, these usually come with very small coverage amounts, and you’re only covered while you work for that employer.

Another option is simplified issue life insurance. In this case, you don’t need to take a medical exam. You just have to fill in a health questionnaire.

Here’s the problem: insurers can still see your medical exam results through the Medical Information Bureau mentioned earlier. However, you may find that they’ll ensure you anyway- depending on their underwriter guidelines.

At the very least, you should consider getting funeral insurance, so your loved ones aren’t out-of-pocket immediately following your death.

Have You Been Denied Life Insurance?

As you can see, being denied life insurance isn’t the end of the world. In fact, you have plenty of options available to you.

While insurance can be complicated, there are plenty of resources to help ensure you have the best health insurance and life insurance to meet your needs. If you need help understanding your life insurance options, get in touch today.