What to Do When You’re Not Approved for Life Insurance

The importance of having life insurance is often immeasurable, especially if you have a family and children to support.

So receiving a “DECLINE” on your life insurance application is a frustrating experience — more so if this isn’t the first decline that you’ve received.

Thankfully there’s hope! Even if it seems completely ridiculous that you were declined — in these scenarios, there’s likely a pretty common reason you weren’t approved.

To help you figure out what happened, here are a few common questions and answers on the subject of life insurance denials which includes: why they happen, how to avoid them, and what you can do next.

Q: I applied to an insurance company that specializes in individuals with health conditions, but was still declined insurance. Why?

A: When this happens, typically the answer is that your specific health condition wasn’t included in what this specialized policy was offering. If you were recommended this policy by one of their agents, and even specifically brought up your health condition, then it’s possible that the agent just wanted to make their commission, regardless of the result.

Q: If that’s the case, how do I know when an agent is doing such a thing?

A: There are a few red flags that you can look out for, which include:

Is the agent offering just a few limited options and imposing “time limits” on when you can take advantage of the offer? A good agent provides a plethora of options, fully explains each, and will never give you a deadline.

Does the agent show any kind of knowledge about your health condition? A good agent, who is actually specialized in helping individuals with medical conditions obtain life insurance, will either have a wide knowledge-base or will do their research prior to meeting with you.

Does the agent seem like they’re in a hurry to make the sale? They probably are — they want you to agree to apply before you realize you’re applying for the wrong product for you.

Is the agent even asking any questions that you would think they would need answers to in order to match you with the best product?

The less questions they ask, the greater chance there is that they aren’t really taking your condition and situation into full account.

“If you have some sort of high risk condition (diabetes, high cholesterol, sleep apnea, etc) then the agent should be asking a list of questions,” says Jeff Rose, a Certified Financial Planner and founder of www.lifeinsurancebyjeff.com. “By not asking the right or enough questions about your condition, the agent is basically setting you up for failure. Make sure the agent specializes in high risk insurance or at least does their homework in asking you the necessary questions.”

Q: I was declined for insurance and wasn’t given a reason! There’s no reason for me to have been denied, I’m perfectly healthy! What happened?

A: It’s quite possible that you missed something, or simply filled something out incorrectly, on your application. It happens all the time! Here are the common simple errors on life insurance applications:

  • An item was left blank
  • You incorrectly answered a question
  • You applied for a higher face-value than your age allows
  • You’re in the wrong state
  • You needed an additional signature
  • You used a P.O. Box as a return address instead of a street address

Q: I applied for one of those “No Exam” policies and was still rejected? What gives?!

A: Not only are the infamous “no exam” policies far more expensive than the traditional commercial policies, but they’re not all that they’re cracked up to be. It’s true, you don’t have to go in for a medical exam, but they are still looking into all of your medical records (provided by the Medical Information Bureau), your pharmacy records, and even your MVR (Motor Vehicle Report).

If you want to find out exactly what they saw, and possibly why you were declined, you can request a copy of your report. Not only is your full medical history listed, but also any previous declines from other insurance companies.

Q: How can I avoid declines in the future?

A: Now that you’ve reviewed some of the common reasons for declines above, you can actively do something about it by taking an active role in the application process yourself, or by hooking up with a trained agency that will look in on every aspect of the entire process, step by step.

They’ll make sure the insurance company has everything they need to make an informed decision, check-in with the insurance company to see how things are going, and will even help speed up the underwriting process.

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About the author: Carrie Smith is the financial artist and owner of Careful Cents, a site that helps creative freelancers overcome financial mountains and make a living on their terms. In May 2013 she quit her full-time accounting job and now works as a full-time business consultant and blogger. She recently launched a new service called, The Client Connection, which matches the best clients with quality freelancers. When she’s not writing about finance, and geeking out over numbers, she enjoys painting, sketching, and making food with her chef husband. You can connect with her in real time on Twitter or Instagram: @carefulcents.

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