What to Do If You Are Denied Life Insurance

What to Do If You Are Denied Life Insurance

A piece of paper with the word “DENIED” in red ink stamped at a diagonal over the words “insurance policy.” A silver pen rests on a diagonal from the bottom right of the image.

It’s unfortunate but true. Although life insurance is vital to your family’s stability, you can be declined for a life insurance policy.

Every company evaluates a life insurance application differently. It comes down to how much risk you pose to the insurance company. But life insurance declined isn’t necessarily life insurance denied full stop.

Insurance companies use underwriting to assess risk. During the underwriting process, an insurance professional looks over your application and details regarding your health and lifestyle. It uses actuarial tables to assess your mortality risk. It then assigns a risk classification to determine your premium.

If your application for life insurance is declined, below are possible reasons.

Reasons Why a Life Insurance Application Is Declined

  • The information you provided was incorrect or not updated
  • A serious medical condition that could pose a mortality risk
  • Age (Some life insurance companies will not provide coverage for people over a certain age.)
  • Unhealthy habits such as smoking
  • A risky hobby
  • A dangerous job
  • Illegal drug use
  • Financial issues such as unpaid debt or a bankruptcy
  • A problematic driving record
  • A criminal record
  • Lying on your application

What to Do If You Have Been Denied Life Insurance

  • Contact your life insurance agent to review your application. Perhaps the information you provided is incorrect.
  • Look for a policy through another life insurance company that offers more flexible underwriting.
  • Go over your lab results with your doctor. While the medical exam data belong to the insurance company, your lab results are yours. If your doctor finds discrepancies they may be able to provide you with an APS (Attending Physician Statement)
  • Retake the medical exam.
  • Appeal the decision. Arm yourself with medical records from your doctor, your updated credit report, or your driving record according to the reason(s) you were declined. Your insurance agent can help you with the appeal.
  • Don’t give up! Work on improving your health, resolving bad habits, and cleaning up a negative driving or credit history.

At the very least a life insurance denial will give you an idea of what you can do to increase your chances of obtaining the right policy for you, such as eating better, exercising, or quitting smoking.

Nicholas Trawinski

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