Because life insurance is something that one will need to be able to “qualify for,” some individuals will find themselves “ineligible” for coverage.
This is why…
We wanted to take a moment and discuss some of the options that may be available to someone who can’t “qualify” for traditional life insurance, as well as provide some useful tips that may prevent you from being told you can’t qualify for coverage in the first place!
Questions that will be addressed in this article will include:
- What are some of the most common reasons why someone won’t be able to qualify for a traditional life insurance policy?
- How can one increase their chances of being able to qualify for a traditional life insurance policy?
- What “other” options might be available to someone who cannot qualify for a traditional life insurance policy?
So, without further ado, let’s dive right in!
What are some of the most common reasons why someone won’t be able to qualify for a traditional life insurance policy?
Generally speaking, the most common reasons why someone might not be able to qualify for a traditional life insurance policy will generally be because they have been diagnosed with some “type” of pre-existing medical condition.
Such conditions may include:
- Heart disease,
That said, however, there also exists a long list of “other” non-medical related reasons why someone may find themselves unable to qualify for a traditional life insurance policy (vs. a no medical exam life insurance policy) as well.
Other non-medical reasons such as one’s:
- Occupation or leisurely activities/hobbies,
- Driving record,
- Travel history,
- Criminal background,
- Drug or alcohol use,
While many of these “issues” will constitute most reasons why someone might not be able to qualify for a traditional life insurance policy, not all of them will automatically preclude someone from being able to qualify for coverage.
Some of these “conditions” may not even be an issue for some insurance carriers or, at the very worse, may only cause someone to have to pay more for their coverage than they might otherwise have to! This leads us to our next topic which is…
How can one increase their chances of being able to qualify for a traditional life insurance policy?
If you’ve been told that you aren’t going to be able to qualify for a traditional life insurance policy, the first thing that you’re going to want to find out is exactly “why” you aren’t able to qualify for coverage.
Is it because…
Of a permanent condition which you can’t correct?
Or is it because of some “factor” that may resolve itself later on down the road? An example might be someone who has just recently gone into remission for cancer, who may not be eligible for coverage today, but five to ten years from now might be able to qualify for a Standard rate.
Would be someone who has been diagnosed with asthma or COPD who is also an active tobacco user. Most insurance companies will automatically deny anyone in this situation. Still, they would be willing to “reconsider” one’s application after they have quit smoking and remained tobacco-free for a minimum of one year.
The second thing…
A person who has been told that they can’t qualify for a traditional life insurance policy should seek a “second opinion.” Preferably from an insurance broker who is able to work with a wide variety of different life insurance companies, which might increase your chances of finding a life insurance company that will be willing to insure you.
You can be sure that you REALLY can’t qualify for coverage right now, and you’ll need to seek out some type of “alternative solution” if you still wish to purchase some type of insurance for your family.
What “other” options might be available to someone who isn’t able to qualify for a traditional life insurance policy?
For those who discover that they can’t qualify for a traditional life insurance policy now or anytime in the near future, there still may exist “additional options” that they may want to consider.
We’ll be honest with you that these “additional options” aren’t going to be ideal in many situations. That said, however, if your two choices are NOTHING AT ALL vs. SORT OF WHAT YOUR WANT, many folks will opt for getting something even if it’s not exactly what they’re looking for.
This is why…
We want to take a look at two of the most common “alternative options” out there and discuss some of the pros and cons unique to each.
Accidental Death Policies.
The first option that a lot of folks will be offered once it has been determined that they can’t qualify for a traditional life insurance policy is an Accidental Death Policy. This is fine, however, it’s important to understand that Accidental Death Policies are NOT life insurance policies. They are Accident Policies.
This means that…
These “types” of policies will never provide a DEATH BENEFIT in the event that you die from a NATURAL CAUSE of death. So, if you die from a disease like:
- Heart disease,
Your loved ones will not receive any money from your policy.
These types of policies…
Will only provide a DEATH BENEFIT to your loved ones in the event that you die from an ACCIDENT: an accident such as a motor vehicle accident, a slip, and fall ,or a natural disaster.
Or in other words…
If you have been told that you can’t qualify for a traditional life insurance policy due to some type of pre-existing medical condition that could shorten your lifespan and make you too risky to insure, dying from this same condition would not be covered under an Accidental Death Policy. Which is the main objection a lot of folks have about these “types” of policies.
The main benefits of…
An Accidental Death Policy is that just about anyone can qualify for such a policy provided they are offered in the state where one lives, and they will provide a significant amount of ACCIDENTAL DEATH coverage for a relatively small price.
Guaranteed Issue Life Insurance Policies.
The second common option many folks will be offered once it has been determined that they won’t be able to qualify for a traditional life insurance policy will be a Guaranteed Issue Life Insurance Policy or a Final Expense Insurance Policy.
These “types” of life insurance policies…
Are true life insurance policies however they will only provide up to about $25,000 in coverage and will contain a GRADED DEATH BENEFIT, which will limit when the policy will begin covering an insured for NATURAL CAUSES of death.
Graded Death Benefits will stipulate that an insured must live for a minimum of two years (sometimes three) after initiating the policy before the guaranteed issue life insurance policy will begin to provide coverage for both Natural Causes of death as well as Accidental Causes of death.
Of these “types” of life insurance policies is that they won’t require one to take a medical exam or answer any health questions, which means that anyone who is a US citizen that lives in a state where these types of life insurance policies should be able to qualify for coverage provided the meet the set age requirements determined by the individual carrier.
The main disadvantages of…
A Guaranteed Issue Life Insurance policy will be that it will only provide a limited amount of coverage, and you will need to wait for a minimum of two years before your policy will provide complete coverage.
We’ll be the first to admit that we’ve covered quite a few topics here rather quickly, which is why we would encourage anyone with additional questions to feel free to give us a call so that we can first determine whether or not you can qualify for a traditional life insurance policy and if not, hopefully, provide you with an “alternative option” that may meet your needs!
So, what are you waiting for? Give us a call today, and let us show you how we can help.