No matter what situation you’re currently facing, the potential of rejection is something no one wants to foresee, especially when it comes to attaining life insurance.
Rejection and denial are always disappointing but can even be scary when youâ€™ve applied for life insurance only to learn that the company has declined your coverage. You figured coverage would be a guaranteed â€œyes.â€
If youâ€™ve been denied life insurance from a provider, you could find yourself in the â€œimpaired risk market.â€ That means there was a risk factor found in your background exam that stood out to the underwriter. Those can include:
- A pre-existing health concern like cancer or a chronic illness
- Lab tests showing a new disease or potential problems such as obesity or diabetes
- Lifestyle choices that can impact your future health, e.g. smoking
- Financial justification
- Notes of previous life insurance denials
- Past criminal record including items such as a DUI
If you currently have one, or multiple, of these pre-existing complications, it may not mean the search for approval for life insurance is over.
In fact, SelectQuote may be able to find coverage for those who have been denied or otherwise found poor, excessively expensive options. Make sure to consult one our licensed sales agents to review for options before making your final choice. Because if you can find coverage now, it often beats the cost of waiting.
Letâ€™s examine how coverage is determined.
When you first apply for life insurance, your application will undergo a process called underwriting. This process is to determine if you qualify for life insurance, and if so, how much your premium will be. The underwriting process will be different at each company, making their standards to qualify all different from one another.
Once your application has undergone the underwriting process, your application status will have one of three outcomes:
The results can be shocking if you find out your application has come back denied. Still, you still have options.
Three Steps to Take if Denied Life Insurance
If youâ€™ve been denied life insurance, consider three actionable steps to get the coverage that best fits your situation:
1. Collect as Much Information as PossibleÂ
Once youâ€™ve received a denied status, the first step should be figuring out why your application wasn’t accepted.
Itâ€™s your right to ask the provider the details of your application status. And the carrier must provide you with a detailed report on why you were denied coverage. This report will include your past medical history, current lab test results, lifestyle choices, risk factors, and any driving or criminal record you may still have.
Some of this information may be shocking, such as unknown lab test results. Still, itâ€™s best to know what exactly is going on, and move forward from there.
2. Verify The ResultsÂ
In any case, human error can occur during the underwriting process, as up-to-date information may have not been available to the underwriter. With the provided detailed report on why you were declined life insurance, youâ€™re now able to verify these results with the appropriate professional.
For example, if your results state that you were denied coverage due to poor lab tests showing an undiagnosed medical problem, itâ€™s best to confirm these tests with your primary care doctor. This is not only to get a check up on whatever might be going on, but also to see if this could be a non-issue that shouldn’t be hindering your approval of coverage.
Other times, you may be denied due to out-of-date driving records, irrelevant financial distress, or past occupational hazards. This information may not be updated on your current records, or a record may have been completely wiped clean over time and had been missed during the application process.
Checking to see if all your records (health, financial, and criminal) are up to date can save you time and ensure appropriate approval.
3. Partner With a Life Insurance Professional
Even after thorough research, it might turn out that the company you applied through was simply not the best fit for your current situation. And thatâ€™s okay. It happens!
Life insurance coverage, and companies, are never a one-size-fits-all solution, so itâ€™s important to find one thatâ€™s right for your needs.
For example, if you were denied due to a new onset of diabetes, one of our licensed sales agents may be able to find you a provider who doesnâ€™t consider certain medical conditions a high-risk factor.
Once your data and results are confirmed, youâ€™re able to pass this information along to a licensed agent trained in denials. From there, they may be able help guide you in the right direction for finding life insurance.
Still Having Trouble Finding Life Insurance?Â Â
If youâ€™re still having trouble finding coverage after taking the aforementioned steps, what are your options?
You may need to consider the option to purchase alternative forms of life insurance.
There are plenty of â€œno-examâ€ or â€œguaranteed acceptanceâ€ insurance plans out there for those in a unique situation. If you decide to go this route, no medical exam or lab tests are necessary, and thereâ€™s no need to present your past medical history.
Don’t be shocked if youâ€™re still asked about your current health status during this process. Misrepresenting yourself and current state can lead to denial.
Itâ€™s important to note that these options are often more expensive and offer a much smaller benefit. Usually payouts can be between a $10,000 and $50,000.
Finally Approved, But Look For A Better Deal Â
Once youâ€™re approved for life insurance, you can still look for a better deal. How?
Take Time to Improve Your Station
Some items affecting your rates may take care of themselves over time, such as driving violations dropping from your record. But with others, you may have some element of control. If you can improve your health through weight loss or stopping smoking, this could benefit your insurability. Your rates are often reduced due to having a lower risk factor.
Still, if you can get insured now, look to do it. Remember, rates go up as you age. When youâ€™ve hit an improvement milestone, you can reassess your rates.
Check Your Workplace Benefits
Life insurance is often offered through employers at group rates. While they might end up being more affordable, the coverage options could be less.
The Easiest Step in Search of Life Insurance
Again, there is no one-size-fits-all insurance plan. But having some form of coverage is better than not having coverage at all.
At SelectQuote, we want to help you find the coverage that is the best fit for your current situation. A licensed SelectQuote sales agent is here to help you. For now. And for the future.
Contact us and receive your free, no-obligation quote today.