Facing rejection is never fun, especially for something as important as life insurance. So, when that initial news comes, what happens if you get denied life insurance?
When you apply for life insurance, providers consider various factors such as your age, health, family history, and even your hobbies! Their main goal is to assess risk. If they are going to insure you, then they need to know how risky it would be to insure you. Each firm or company calculates this differently–with each willing to accept different levels of risk. The good thing is, even though your life insurance application has been denied, you still have options!
Let’s go over some reasons why you may get denied life insurance and what are your next steps.
Reasons You May Get Denied Life Insurance
Life insurance companies may have many different reasons to deny your policy. Here are a few examples:
- Health Problems– Unfortunately, health problems make you fall into high-risk categories. The issues may look like diabetes, high blood pressure, obesity, chronic illnesses and any other early-stage condition such as cancer. Showing that your illness is being treated may help your application status.
- Tobacco Usage– Due to its rapid health decline, people who smoke usually pay at least twice as much for a life insurance policy. Smoking includes the use of e-cigarettes, vape pens, traditional cigarettes, cigars, pipes, and chewing tobacco. If you want to qualify as a non-smoker, most firms require you to be nicotine-free for at least a year. Unfortunately, companies usually count nicotine patches or gum under smoking, but it may get you a slightly reduced rate.
- ‘Dangerous’ or Risky Hobbies– If you’re someone who enjoys living on the edge, life insurance companies usually define dangerous hobbies as any activity that increases your likelihood of injury or death. Your policy might not be denied outright due to risky hobbies, but it may cause you to pay more for coverage than you think. A few common hobbies considered ‘dangerous’ by insurance are flying, hang gliding, rock climbing, bungee jumping, skydiving, drag racing, and scuba diving.
- Driving Record– Safe driving doesn’t just affect your automotive insurance, it also helps you qualify for life insurance.
- Oversights & Omissions– Be mindful when you fill out your life insurance application. Your premium is based on correct information. Any intentional or unintentional omissions discovered by the insurance company could lead to your application getting denied. It never hurts to double-check–especially in this instance!
What Are My Next Steps?
So, what’s next? You can always talk to your insurance agency after your first try was denied. Here are some next steps to take in order to better understand your available options:
- Meet with your Insurance Agent– Working on your own can be difficult when it comes to insurance. Licensed insurance agents will be able to help you find the best fit for your situation. Some agents even specialize in helping high-risk people get insurance.
- Try a different Agency– Every insurance agency is different and has different standards for evaluating insurance applications. If you were denied by one and see no future of finding a plan with them, then the best course of action is to try a different agency.
- Employer-Provided Plan– Some employers offer group life insurance bundles as a perk for being an official employee. This may be the easiest way to get coverage if you are unsure that your insurance firm will accept you. Other insurance plans may give you better benefits, but when you don’t have many options–any coverage is better than none at all.
- Apply at a Later Time– We all know the saying, “if at first you don’t succeed–try again.” Giving yourself time to plan around ‘dangerous’ hobbies, get your health issues under control, or improve any other lifestyle choices may be your best option for life insurance. Plus, if an agency sees you are making the effort to improve, then they are more likely to help you get a plan.
Other Policies To Consider If You Get Denied Life Insurance
Term Life Insurance is very conventional and is the most popular type of coverage. It lasts for a specific set of years (usually 10-30). If you pass while the policy is still in effect, your beneficiaries will receive an insurance payout. If you are looking for a more affordable option, term life insurance is a simple plan that will provide you financially safe net income.
Guaranteed Universal Life lets you skip both the medical and health exams. Like the name, it’s guaranteed for anyone who applies, but there is a waiting period before the full benefits are given. It is similar to a term life insurance policy, but it lasts until the age you choose. Premiums always stay the same and the death benefit never decreases. This policy provides a no-lapse guarantee as long as premiums are paid as outlined with policy loans, which may affect this if used. The cash value is built in small amounts but is only used to supplement premiums in later years.
There are just a few options, but feel free to ask your insurance agent for more information and policies. At Arlington Greene, we can help you decide what works best. We prefer to review all the options possible, and never pressure you into one policy over the other. If you need help or have any questions about purchasing a life insurance policy, please reach out and we will be happy to help!
We also have a free Life Insurance Calculator! It’s easy to use. If you have any questions, we also offer free quotes from our trusted advisors.
Have Questions? Call Us Today!
Coming to a decision about life insurance can be so much to consider. With so many different policies, it can be hard to determine what you need all on your own. At Arlington Greene, we have experts in the life insurance field who are ready to help. Arlington offers all the same policies you would find going directly through a specific insurance company. We can also help you find the right coverage at the best rates by comparing all side-by-side. Our team can help you decide on the best plan for your situation. We can curate a plan just for you—guiding your family into securing your financial future!