Denied life insurance? What To Do Next

Written by Kim Wilhelm

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Last Updated 14 Apr 2024

Here's a common scenario. You've recently had a health scare. Perhaps your financial stability has improved. Perhaps you've just put it off because life got in the way. You're finally ready to speak to an insurance company and get a life insurance policy or funeral policy so that your death won't be a financial burden on your family. And then, to your surprise - you're denied life insurance coverage.


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Being denied coverage is not easy, but it's not the end of the world. You can still obtain life insurance in one form or another by applying to a different life insurance company or applying for a different policy. There are many life insurance options available out there, even if you are suffering from a serious medical condition, are a senior citizen, or have submitted a positive drug test to an insurer in the past.

Let's take a look at some of the options life insurance companies have that might match your needs.

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Why You May Be Denied Life Insurance Coverage

There are a number of reasons an insurance company might turn you down after you've applied for a policy, including:

  1. High Cholesterol, Triglycerides, or Glucose Levels: High cholesterol levels can indicate a higher risk of heart disease and stroke, which can result in a decline or approval with higher premiums. High blood sugar levels may be an indication of diabetes, which can lead to a decline. Diabetes can increase the risk of various health complications.

  2. Overweight or Obese, Sleep Apnea: Being overweight or obese can pose significant health risks, especially related to cardiovascular health. While it may not always result in a decline, it can lead to higher premiums. The need for oxygen use, except for sleep apnea, can often lead to a decline. Oxygen use is generally considered an uninsurable condition.

  3. Elevated Liver Function: High liver function levels can suggest inflammation or damage to the liver. Depending on the severity, it can result in a decline or approval with higher premiums.

  4. Blood or Protein in the Urine: The presence of blood or protein in the urine can be an indicator of kidney disease, leading to a decline in life insurance coverage.

  5. Hepatitis: Depending on the type and treatment status, a history of Hepatitis may result in a decline or require completion of treatment before qualifying for life insurance.

  6. History of Cancer or HIV Diagnosis: A previous history of cancer can place individuals in a high-risk category. Approvals or declines may depend on the type of cancer, remission period, and other factors. Some life insurance companies may still consider HIV or AIDS high-risk and decline coverage. There are insurers that specialize in providing coverage for individuals with HIV.

  7. Positive Alcohol Marker: A positive alcohol marker, indicating elevated liver functions from alcoholism, can result in a decline. Applicants may need to demonstrate sobriety over a period of time before reapplying.

  8. Hazardous Occupations or Hobbies: Certain dangerous occupations may lead to a decline in life insurance coverage due to the increased risk associated with the work. Engaging in activities like flying, skydiving, scuba diving, or extreme sports can be viewed as risky by insurance companies and may result in a decline.

  9. Bad Driving Record: Multiple tickets, accidents, or driving under the influence (DUI) can lead to a decline or postponement of the application until a clean driving history can be demonstrated.

  10. Income Limitations: Some insurance companies may have minimum income thresholds for issuing life insurance policies. They may also consider an applicant's income to assess the reasonableness of the coverage requested.

If you've previously been denied life insurance for any reason, this may also impact your ability to acquire traditional life insurance coverage.

What to Do After You've Been Denied Life Insurance

If you have recently been denied life insurance coverage, it is important to understand the reasons for the denial and take appropriate steps to address the situation. Here's what you can do if your life insurance application has been declined:

1.Get In Touch With the Life Insurance Company

Request detailed information from the insurance company regarding the specific reasons for the denial. Understanding why you were denied coverage will help you address those issues and avoid future rejections. You may be able to correct the issue and reapply successfully, either with your insurer or with another one of the life insurance companies you've considered. If you disagree with the insurance company's decision, you have the option to appeal. Depending on the reasons for denial, you may be able to provide additional documentation or seek further evaluation from your primary care physician to support your case.

2.Get Your Life Insurance Medical Exam Results

If your life insurance policy was declined based on medical exam results, obtain copies of your medical records used by the insurance company in their evaluation. Review the records for accuracy and consult with your doctor to ensure any errors are corrected. These records may also be important for future applications and to provide a complete and accurate picture of your health.

3.Call an Insurance Agent

If you can't correct the issue, it's time to get in touch with an insurance agent that can access multiple life insurance companies. The right independent insurance agency can find a company or policy that matches your needs and offers the best possible rate based on your circumstances. Remember, each life insurance company has its own underwriting criteria to assess the risk of applicants. If one company rejects you, that's not to say another agency won't accept your application for a life insurance policy.

4.Consider Guaranteed Issue Life Insurance or Other No-exam Policies

If your health condition is not under control or you are not compliant with your doctor's recommendations, a no-exam policy may be a suitable option. These policies typically do not require a medical exam and may have less stringent underwriting guidelines. Not all of these policies offer value for money or worthwhile coverage, so always take the time to seek professional assistance from a company like Final Expense Direct to find the best possible option.

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Which Policies Offer The Best Coverage If You've Been Denied Life Insurance?

If you've had a hard time buying life insurance for financial reasons or because of health issues like cancer, diabetes, old age, high blood pressure, failed medical exams, or a hazardous occupation/risky hobbies, you can still find insurance that will help your family financially after your passing. Here are a few to consider:

1.Simplified Issue Life Insurance with Immediate Benefit

Simplified issue life insurance is designed to provide coverage with a simplified underwriting process. It offers a streamlined application process without requiring a medical examination. Unlike other policies, oftentimes the applicant is able to qualify for immediate benefit with no waiting period. This type of policy is typically suitable for individuals who may have underlying health conditions or who prefer to avoid medical exams. Here are key features of simplified issue life insurance:

No Medical Exam: Simplified issue policies do not require a medical examination. Instead, applicants answer a series of health-related questions. The insurance company uses this information to assess the applicant's risk profile.

Quick Approval: Since there is no need for a medical exam, simplified issue policies often offer faster approval times compared to traditional life insurance. In most cases, coverage can be approved the same day.

Health Questions: Applicants must provide information about their medical history, current health status, and whether they’re a tobacco user. The insurance company uses this information to evaluate the applicant's risk and determine the premium rate.

Coverage Amounts: Simplified issue policies typically offer coverage amounts ranging from a few thousand dollars up to a certain maximum limit, such as $50,000 or $100,000. The coverage amount is determined based on the applicant's age, health, and budget.

Affordability: While simplified issue policies may have higher premium rates compared to fully underwritten policies, they provide accessible coverage for individuals who may not qualify for traditional life insurance due to health reasons.

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2.Simplified Issue Life Insurance with a Graded Death Benefit

Insurance with a graded death benefit is a specific type of policy that offers partial coverage during the initial years of the policy. The full death benefit is typically not payable immediately after the policy is issued. Here are the key features of insurance with a graded death benefit:

Graded Benefit Period: The policy establishes a graded benefit period, which is a predetermined period of time (usually 2-3 years) during which the full death benefit is not payable. Instead, the policy pays out a portion of the death benefit or refunds the premiums paid with interest, depending on the policy terms.

Eliminates Risk for Insurers: Insurance with a graded death benefit helps manage the risk for insurance companies when insuring individuals who may have significant health issues. By providing partial coverage during the initial years, insurers can mitigate their exposure to high-risk policyholders.

Gradual Increase in Coverage: After the graded benefit period ends, typically after two or three years, the policy transitions to providing the full death benefit. This means that if the insured passes away after the graded period, the policy will pay out the full coverage amount to the beneficiaries.

Appropriate for High-Risk Individuals: Insurance with a graded death benefit is often used by individuals who may not qualify for other types of life insurance due to health conditions or lifestyle factors.

Considerations: When opting for insurance with a graded death benefit, it is important to carefully review the policy terms and understand the graded benefit period. Ensure that the terms align with your specific needs and expectations for coverage.

3.Guaranteed Issue Life Insurance

Guaranteed-issue life insurance is a type of policy that provides coverage without requiring any medical questions or exams. It is specifically designed for individuals who have significant health issues or may be considered high-risk. Here are the key aspects of guaranteed issue life insurance:

No Medical Questions: Unlike other life insurance policies, guaranteed issue policies do not ask any health-related questions. This means that applicants are not required to disclose any medical conditions or undergo a medical examination.

Guaranteed Acceptance: As long as the applicant meets the age requirements (usually between 50 and 80), acceptance is guaranteed. This makes guaranteed issue policies accessible to individuals with serious health conditions or a history of medical issues.

Limited Coverage Amounts: Guaranteed issue policies typically offer lower coverage amounts compared to other policies. The coverage amount can range from a few thousand dollars up to a maximum limit, which is often around $25,000.

Higher Premiums: Guaranteed issue policies generally have higher premium rates due to the added risk that comes with insuring people without medical underwriting. The convenience of guaranteed acceptance comes with a higher cost.

Final Expense Coverage: Guaranteed-issue life insurance is commonly used to cover final expenses, such as funeral costs, outstanding medical bills, or other end-of-life expenses.

Finding the Right Insurance For Your Needs

Final Expense Insurance is a crucial financial tool that offers peace of mind and financial protection for your loved ones.

Remember, consulting with an experienced life insurance professional can help you navigate the options and find the best policy for your specific needs and budget. They can assess your needs, explain the details of each type of life insurance, and guide you toward the most suitable option. Call Final Expense Direct today if you've been rejected for insurance, we work with all of the top insurance companies and in most cases will be able to get you approved for coverage.

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