What is a modified life insurance offer or approved other than applied?

A modified life insurance offer is when your final policy premium is higher than your initial quotes. Here’s why it happens and what to do next.

Amanda Shih author photoLogan Sachon

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Amanda Shih

Amanda Shih

Editor & Licensed Life Insurance Expert

Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

&Logan Sachon

Logan Sachon

Senior Managing Editor, Life Insurance & Research

Logan Sachon is the senior managing editor of life insurance and research at Policygenius, where she edits life insurance content and leads life insurance surveys and data studies. As a journalist, her work has appeared in The Guardian, Business Insider, CNN Money, BuzzFeed, Money Under 30, VICE, New York Magazine, and elsewhere.

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A modified offer is an offer for life insurance with a rate that is higher than what you were initially quoted when you applied.

Also called "approved other than applied," modified offers are usually the result of information the underwriters uncover during their review of your records and medical exam results that wasn't in your initial application.

It can be disappointing to be offered a policy at a higher premium than you expected. But if you accept your offer (or an offer for reduced coverage), you can get covered and protect your family while you comparison shop or improve your health and apply for lower rates.

Key takeaways

  • Being approved other than applied for life insurance means your policy premiums are higher than you were first quoted.

  • The higher premiums reflect information discovered during underwriting.

  • You can accept, decline, reduce the coverage amount, or shop around for a new offer.

  • Even if you do shop around, it's best to first accept the policy, either as is or at a reduced coverage amount, so that your beneficiaries are financially protected, while you’re reapplying elsewhere.

What to do if you get a modified life insurance offer

If your life insurance application is approved other than applied after you go through underwriting, you have a few options. Working with an agent or broker, you can:

  • Accept the modified offer

  • Decline the modified offer

  • Adjust your coverage amount or term length to lower the premiums, and then accept that offer

  • Apply for a lower rate with a different insurer

Each life insurance company views every health condition a little differently. If you receive a modified offer and want to apply to another insurer, a Policygenius agent can use your full medical history to compare underwriting guidelines from multiple providers and may be able to recommend a company that is more likely to offer you more favorable premiums.

But even if an agent thinks you’ll get a better offer elsewhere, you should still accept your current offer and continue to pay your premiums until you are approved for a more affordable policy. After you’re approved and sign your new policy, you can cancel the more expensive policy.

Life insurance reconsideration

If your premiums are higher than you anticipated, you may benefit from accepting the current offer but making some lifestyle changes like quitting smoking or giving up a risky hobby. If you sustain the changes for 12 months or more, you can ask your current provider for a rate reconsideration, which could result in lower rates. Your insurer can tell you when you'll be eligible for reconsideration, and what they'd need to see from you in order to lower your premiums.

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Why you should accept your modified life insurance offer

If you can’t find a more favorable life insurance offer, it’s best to accept the offer as is (if the higher premiums are within your budget), or adjust the term and/or coverage amount on your policy to get it to a lower premium. Even if you’re planning to reapply for a different policy immediately, there are a few reasons why it’s better to accept the offer you have while exploring your other options:

1. You won’t risk going without protection

When you accept an insurance offer, you are covered once you submit your signature and premium payment. Once your policy is active, your beneficiaries will receive the policy's death benefit if you die.

2. You lock in the first insurer’s premiums

Accepting the offer will lock in the premiums offered to you. If you decline the offer or leave it hanging while you apply to other companies, there is a risk that the modified offer could increase, based on additional information uploaded to your Medical Information Bureau (MIB) record.

Life insurance companies upload your application materials and the results from your medical exam to the MIB, a reporting database used by all life insurance companies. If you decline an offer from one company and apply to another one — immediately or in the future — the second insurer can access your records in the MIB, but they may also do their own research.

For example, if Insurer A only looked at five years of medical records, Insurer B might decide to look back 10 years. These additional records could reveal health information that would increase your premiums. And because this information is also added to your MIB record, Insurer A now has access to it as well, meaning they might increase their initial offer to you based on the new information.

3. There is no penalty for canceling a term life insurance policy

If you do find a cheaper policy, whether now or in the future, you won’t face a cancellation fee when you cancel your current term policy. You also won't be refunded any premiums you paid if you cancel, during the time your policy is active, if you die, your family with get the policy's death benefit.

(Note that if you have whole life insurance, canceling your policy may come with some penalty.)

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What are the reasons for a modified life insurance offer?

Your life insurance quotes are based on the personal and medical information you share when you apply and are solidified into an offer based on your medical records, the results of your medical exam, and other details like your driving record. It’s not unusual for some small discrepancies to appear between your life insurance application and the medical exam. People often forget to name prescriptions or misstate their weight by accident. Slip-ups like these won’t always leave you with a higher premium, but some might.

For example, if your medical exam reveals that you have high cholesterol and you were unaware when you applied, your final premiums could become back higher than the initial quote you received. If you forgot to mention a traffic violation on your driving record, you’d also see your premiums increase.

You also may get a modified offer if the life insurer cannot find financial justification for the coverage amount for which you originally applied. Your coverage is principally meant to insure the income that you would earn during your working years and cover final expenses like medical bills and burial costs, as these would financially impact the loved ones you leave behind

Be as honest and thorough as possible when you apply for a policy, and your premiums are less likely to change dramatically throughout the process. If your application is approved other than applied, it’s better to accept the policy you’re offered, with slightly less coverage or as is, to ensure that your loved ones are financially protected when you pass away.

Authors

Editor & Licensed Life Insurance Expert

Amanda Shih

Editor & Licensed Life Insurance Expert

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Amanda Shih is a licensed life, disability, and health insurance expert and a former editor at Policygenius, where she covered life insurance and disability insurance. Her expertise has appeared in Slate, Lifehacker, Little Spoon, and J.D. Power.

Senior Managing Editor, Life Insurance & Research

Logan Sachon

Senior Managing Editor, Life Insurance & Research

gray twitter icon linkgray linkedin icon link

Logan Sachon is the senior managing editor of life insurance and research at Policygenius, where she edits life insurance content and leads life insurance surveys and data studies. As a journalist, her work has appeared in The Guardian, Business Insider, CNN Money, BuzzFeed, Money Under 30, VICE, New York Magazine, and elsewhere.

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