If you’ve been denied life insurance—don’t give up! There are still ways for you to get coverage
If you’ve decided to start applying for a life insurance policy, you’re
on the right track. Life insurance is important for anyone who has a dependent
person in their life or has outstanding debts like a mortgage or a college
loan. However, sometimes—for a variety of reasons we’re going to go get
into—your life insurance application could get denied. If your application gets
denied, it can definitely be discouraging. But, you shouldn’t give up on
getting life insurance coverage!
In this article, we’re going to be walking you
through the steps you need to take if your life insurance application is
denied. So, if you are searching for more options to get a life insurance
coverage after getting a rejection letter, keep reading!
1.
Find Out Why You’ve Been Denied
Get as much information as you
can about why you were denied a life insurance policy
The
first step to getting coverage is finding out why you were denied and working
from there.
If you sent in your application after filling
out a questionnaire or undergoing a medical exam, then the information you
provided will have something to do with why you were denied coverage. The key
here is to find out what part of your application was the cause for denial. In
most cases, insurance companies don’t want to take on too much of a risk, so
they will deny policies to people that pose a high risk. If you are deemed high
risk and denied coverage it is most
likely due to chronic health problems, a dangerous job, criminal record, or
risky lifestyle choices. The insurance company should make it clear in your
rejection message why you were denied. But, in the case that they do not, you
can call the insurance company and ask for more information. It may be possible
that you aren’t eligible for whole life insurance, but you are eligible for a
term life insurance policy or a different type of policy. Once you know the
reason that you were unable to get life insurance, you can move on to the
next step.
2.
Review Your Case and Your
Application
Once you’ve discovered why you
were rejected, you need to verify all of the information submitted is correct
Sometimes
out of date information can cause a rejection from an insurance company.
The next step you need to take once you’ve
confirmed the reason for rejection is to review your case. The first thing you
need to do is to verify that all of the information that you submitted is
correct. You never know, it is very possible to check the wrong box and be
denied based on an incorrect input. It is also important to make sure that all
of the information sent over by your physician is correct as well. If the
documents sent over were out of date or included incorrect information, it is
in your best interest to get in touch with the insurance company to submit an appeal. If there is out-of-date or
incorrect information found, you can ask your doctor to submit the correct
documents. There are also nonmedical factors that can lead to you getting
rejected like out-of-date information about outstanding debts or a previous
high-risk job.
If there aren’t any inconsistencies in the
information you submitted, then it is time to move on to the next step.
3.
Try to Get a Different Type of
Life Insurance
While you may be unable to get
the life insurance plan you applied for, there could be other options available
to you
Explore
all avenues for getting life insurance coverage.
Even if your application is rejected due to
one of your health or lifestyle factors, there still could be plans offered
that are available to you. For example, if you were rejected for a whole life
insurance plan, see if there are options for you to get a term life insurance
policy. Often, insurance companies are more willing to take on someone at
higher risk for a term life insurance policy than a whole life insurance
policy. In general, term life insurance policies are lower risk for insurance
companies since there is always a chance the policyholder outlives the term and there is no payout
necessary.
Beyond trying to apply for term life insurance
over whole life insurance, there is also the option to forgo the medical exam
as a way to get life insurance. If you were previously denied life insurance
based on a health condition or choices that affect your health—like
smoking—then no medical exam life insurance could be the right option for you.
4. Try to Get Life Insurance Through Your Employer
Life
insurance through your employer is usually the minimal amount.
Just because your application was denied
doesn’t mean you are completely ineligible for life insurance. Many people are
able to get some life insurance coverage from their employer. Unfortunately,
life insurance coverage through an employer is often far from the recommended
coverage amount. On average, we recommend that individuals take out a life
insurance policy that is anywhere between 10 to 12 times their yearly income.
If you want to get life insurance through your employer, the
payout will likely be somewhere between $50,000 to $100,000. For most people,
this isn’t nearly enough coverage—but it is better than nothing.
Another advantage of getting your life
insurance through your employer is that you will not have to undergo a medical
exam or submit a questionnaire. For people who have chronic illnesses, this is
a great way to get some protection. Since the plan is purchased in bulk by your
employer and standard coverage is relatively little, policyholders pose a little
financial risk. Because of the low-risk level, they do not need your medical
information.
If you want to get coverage through your
employer, it is highly recommended that you supplement your policy.
Supplementing your policy can get expensive and the money will be taken out of
your income and automatically put toward expanded coverage. Just like with no
medical exam insurance, getting the coverage amount you want could be more
expensive than you thought. Though it can be expensive, it is ultimately better
to have peace of mind and life insurance coverage than it is to go uninsured.
If coverage isn’t offered by your employer or
you are outside of traditional employment, then you should move on to the next
step.
5. Get Help From an Expert
An
insurance agent can give you a behind-the-scenes perspective on life insurance.
Sometimes the best advice you can get is from
someone who works in the field. If you’ve tried all of the previous strategies
we’ve listed with no results, then we recommend seeking out the help of an insurance agent. Insurance agents have an
internal look in the industry and can help you prepare an application and
establish a strategy to get you coverage.
By giving your information over to an
insurance agent, they can give you greater insight as to why your application is
being rejected. From there, they can offer ways to address or work around the
factors preventing you from getting coverage. They also may suggest different
insurance companies that you can apply to that will give you a better chance of
getting approved. They may also suggest lifestyle changes you can make in an
effort to make your application more appealing to insurance companies. For
example, they may suggest you quit tobacco use, which is a major factor in most
life insurance applications.
Once you and your insurance agent have come up
with a game plan, you can submit your revised application for a better chance
of approval.
Getting insurance isn’t always
straightforward, but that doesn’t mean it’s impossible. If you are having
trouble getting coverage, then there are several avenues you can take to secure
your family’s financial future. Ultimately, it is always to be covered rather
than to go uninsured. If you’ve been denied, know that there is a solution out
there that will get you the coverage you need.
Read also our other finance articles.