Whether it’s a declined college application, an unreciprocated right swipe, or a denied life insurance application, rejection is never easy. While we can’t help with the first two scenarios, we have some answers if your insurance application was rejected.
Life insurance companies use a process called underwriting to determine premiums and overall eligibility. Each insurer’s underwriting guidelines vary, so a rejection from one company doesn’t necessarily mean you can’t get insured elsewhere.
We’ll walk you through next steps and options if your insurance application was declined.
Underwriting criteria vary across life insurance companies
If you don't qualify for traditional life insurance coverage, there are alternatives available to you
Working with a licensed independent broker is the best way to navigate your options after a declined application
During underwriting, life insurance companies look at many different factors – including hobbies, family history, health, and age – to determine your risk. Each insurance company sees risks differently. Company A may decline you because you have diabetes, while Company B may accept you. These are some of the most common application rejection scenarios:
If you’re suffering from a chronic illness at the time you apply, the insurer may decline your application.
Your chances of acceptance increase if you can show that your illness is being treated through an attending physician’s statement (APS).
Common health conditions that could cause a denial or higher premiums include:
Smoking or other nicotine use, skydiving, or a history of alcoholism won’t usually lead to a rejection, but premiums will be significantly higher. If you have medical complications related to lifestyle choices, like emphysema or lung cancer due to smoking, those will increase the likelihood your application will get declined.
Even if you have poor health, a family history of cancer, or a risky hobby, don’t leave out anything the insurance company needs to know on your application or during the phone interview. If you lie about anything, the insurance company can deny your application outright or increase your premiums later if they discover you withheld information.
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If your life insurance application is declined, your life insurance agent or broker will contact you and explain why. Your broker can then work with you to strategize what to do next.
If you decide to apply to another life insurance company, you can reuse the medical exam from your first application, which can shave a few weeks off your application timeline.
Sometimes, insurance companies won’t reject your application outright and instead will postpone your application to another date, usually six months to a year later. If, for example, you have a recent medical diagnosis, the insurer typically will allow a full year to pass for your body to adjust to any new medications or symptoms and then check back with you to verify stability.
If a life insurance company deems you to be high-risk, you may still be able to get insured by purchasing an alternative form of life insurance. The best options available are usually no-exam life insurance policies called final expense life insurance that offer lower coverage:
Many employee benefits packages include a small amount of life insurance coverage, called group life insurance, which you’re entitled to even if you have a serious medical condition or a dangerous hobby.
An application rejection doesn’t mean you won’t be able to get life insurance indefinitely. Each insurance company has its own underwriting standards, so your age, certain health conditions and/or risky hobbies will be treated differently depending on where you apply.
Comparing rates and talking to a licensed independent broker like Policygenius is the best way to exhaust all your options and make sure you’re getting the best coverage at the best price. To understand the reasons why your application was denied, talk to your broker to learn what options are available to you. From there, you may have to make some healthy lifestyle changes or wait a certain period before the insurer will reevaluate and approve your application.
A life insurance application may be denied if you have high-risk medical conditions, dangerous hobbies, or if you left important information off your application. You may also be ineligible for certain policies due to advanced age.
It depends on the reason you were denied and the insurance company. If your application was denied due to complications related to smoking, for example, you may have to wait six months or more and show lifestyle changes to the insurer.
Certain types of life insurance policies, such as term life, are better suited for younger, healthier individuals. However, hardly anyone is completely uninsurable. Final expense life insurance options, such as guaranteed-issue and simplified-issue life insurance, are available to almost everyone.
Find out what you need to know before making this important purchase.
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