Here at IBUSA, we’ll often have clients give us a call after they have already had their first (and sometimes second) life insurance application declined or postponed.
As a result, we’ve gained a lot of experience helping those who have had a difficult time qualifying for life insurance in the past.
This is why…
We wanted to take a moment and discuss our approach to helping those who have already been declined coverage or postponed by a life insurance company as well as give you (the reader) a better idea about what kind of options you may have available to you now.
With that said…
Regardless of whether or not you’re going to be able to qualify for a traditional term or whole life insurance policy, the first that we here at IBUSA are going to need to determine is…
What kind of life insurance policy were you declined for?
Understanding what “kind” of life insurance policy you applied for will give us a pretty good idea about what the approval requirements looked like during your application process.
You see, different “types” of life insurance policies will have different underwriting requirements.
Fully underwritten term or whole life insurance policies will typically require one to take a medical exam, while Simplified issue or No medical exam life insurance policies won’t.
“So, what type of life insurance policy did you apply for?”
From there, we’re now going to want to know precisely…
Why were you declined life insurance coverage?
And while this may seem like the most basic question out there, you would be amazed by how frequently we get calls from prospective clients telling us they have just recently been denied life insurance coverage by aren’t sure why.
A lot of times you will be declined for life insurance because of blood work. But most people have no idea what the reason was for.
In cases like these…
We’ll first try to determine what was the most likely reason why they were originally denied on our own, and then if that doesn’t work, we’ll usually ask the client to call the insurance company that did deny them to clarify why.
We’ll also ask them to request a copy of their lab results as well so that we can see if something in those results sheds any light on why they were denied coverage.
By understanding “why” an individual has been denied coverage, we’ll have a much better idea about whether or not their denial is something that will cause most life insurance companies to deny them.
Was their “decline” simply something a particular life insurance company had an issue with (e.g. recreational marijuana use).
Some potential reasons for someone to be denied life insurance can, over time, go away.
For example, some life insurance companies won’t insure anyone who has:
- Applied for bankruptcy within the past two year,
- Been convicted of a DUI within the past 12 months,
- Has been convicted of a felony within the past 5 years,
- Plans to travel to certain parts of the world within the next six months,
All of which could be a reason why a certain life insurance company would choose to deny your application today, but would be willing to insure you 6 months to 5 years from now.
That’s why it’s so important to understand why an individual has been declined life insurance in the first place. From there, the next obvious question is “who” denied you.
Which life insurance company denied your application?
Now that we understand what “kind” of life insurance policy you applied for and “why” you were denied coverage, understanding “which” life insurance company you applied with is going to be important.
This is because now we’ll have enough information to determine whether your “situation” is the cause for you DECLINE or is it that the underwriting guidelines used by the insurance company that you applied with causing the PROBLEM.
All insurance companies are going to have their own internal underwriting guidelines that they’re going to use to help them determine who they will and won’t insure. And while some insurance companies may decide to be extremely strict on specific “issues,” other insurance companies may not.
Common examples of this…
Include how different life insurance companies will view:
- Marijuana use,
- Certain pre-existing medical conditions,
- Previous bankruptcies,
- Previous felony convictions,
- Previous drug or alcohol abuse issues,
This is why understanding “which” life insurance company (or companies) you have been denied by is so important.
If it turns out that you have been denied by a company that is super conservative when it comes to a particular underwriting issue, there could be a really good chance that you could apply elsewhere and receive a different outcome.
If you were denied by the best life insurance company for your particular situation and you were still denied coverage, we may then need to look at why and possibly seek out an alternative product that may be easier to qualify for.
It just doesn’t make sense?
Sometimes we’ll have an individual call us and tell us that they were denied coverage due to something strange.
For example, maybe their blood work and lab results showed:
- An increased level of proteins in their urine (proteinuria).
- An increased level of liver enzymes in their blood (indicative of possible liver damage).
- Excessive amounts of alcohol in their blood or urine.
In cases like these, where one’s lab results and blood work resulted in a declined life insurance applicaiton, we’ll often recommend that they choose to apply with a different life insurance company that will order a new medical exam for them to take (free of charge).
We will only make this recommendation when both the client and we here at IBUSA feel that the “abnormal” test result wasn’t accurate.
By taking a New Paramedical Exam, a client will be able to
ONE: Get the process started again with a new life insurance company.
TWO: Then go see their primary care physician and inform them of the “abnormal” test result that they received.
This way, but the time the new test result comes in from the new insurance company, we’ll also have confirmation from your primary care physician that nothing is wrong.
Or, if there is something wrong, you and your doctor can begin addressing whatever your issue may be early on!
If we here at IBUSA have determined that “what” is causing you to be declined life insurance coverage is simply going to prevent you from being able to qualify for a traditional term or whole life insurance policy anywhere, we’ll usually try to suggest an “alternative product” that you may be able to qualify for.
If no other option seems possible, consider applying for an Alternative Product.
Sometimes, it’s just not going to be possible for someone to be able to qualify for a traditional term or whole life insurance policy.
And while we here at IBUSA will do everything possible to keep this from happening to you, we realize that sometimes there’s just nothing we can do to prevent this from happening.
For this reason…
We spend a significant amount of time researching different life insurance companies and their products so that in the event that an individual isn’t able to qualify for a traditional life insurance policy, they may still be able to find coverage elsewhere.
Each of which will have their own pros and cons attached to them which is why we would encourage anyone who is thinking about purchasing one of these “types” of products to first give us a call so that we can provide them with an honest assessment of them and hopefully help you determine whether or not they will meet your needs.
So, if you’re ready to compare some of your options, just give us a call and let us show you what we can do for you!
Frequently Asked Questions
Why would a life insurance application be denied?
Life insurance applications can be denied for various reasons, including a history of serious health conditions, risky hobbies or occupation, recent drug or alcohol use, and a history of criminal activity or dangerous behavior.
Can a denied life insurance application be appealed?
Yes, it is possible to appeal a denied life insurance application. It is recommended to review the reason for denial and gather any additional medical or personal information that may strengthen the case for approval.
Can I reapply for life insurance after being denied?
Yes, you can reapply for life insurance after being denied. However, it is important to understand the reason for denial and address any issues before reapplying. Applying with a different insurance company may also be an option.
How long does it take to get a decision on a life insurance application?
The timeline for a life insurance decision can vary depending on the insurance company and the complexity of the application. It typically takes 2-6 weeks to get a decision.
What should I do if my life insurance application is denied?
If your life insurance application is denied, you should review the reason for denial, gather any additional information that may strengthen your case, and consider appealing the decision or reapplying with a different insurance company. You may also want to consider other options for protecting your loved ones, such as disability insurance or long-term care insurance.
Will my premiums be higher if I reapply after being denied for life insurance?
It is possible that your premiums may be higher if you reapply after being denied for life insurance. This is because insurance companies may view you as a higher risk due to the previous denial, and may charge higher premiums to offset that risk.
Can a pre-existing condition lead to a denied life insurance application?
Yes, a pre-existing condition can lead to a denied life insurance application. Insurance companies may view pre-existing conditions as a higher risk and may choose to deny coverage or charge higher premiums.
Is there a difference between a denied life insurance application and a rated policy?
Yes, there is a difference between a denied life insurance application and a rated policy. A denied application means that the insurance company has chosen not to offer coverage, while a rated policy means that the insurance company has offered coverage but at a higher premium rate due to increased risk factors.
Can I get life insurance through my employer if I have been denied by a private insurer?
It is possible to get life insurance through your employer even if you have been denied by a private insurer. Employer-sponsored life insurance policies may have different underwriting requirements or may offer guaranteed issue coverage regardless of health status.
What can I do to increase my chances of getting approved for life insurance?
To increase your chances of getting approved for life insurance, it is recommended to maintain a healthy lifestyle, avoid risky activities or behaviors, and disclose any relevant medical or personal information on the application. Working with an experienced insurance agent can also help you find the right policy and navigate the application process.