Life insurance is something that thousands of people think is an absolute necessity, and it should come as no surprise.
It is capable of giving you peace of mind and the financial support that you and your family members might need if you happen to fall sick, among other things.
Unfortunately, you might end up getting denied a life insurance policy. The insurance company you contacted can do it if you are viewed as high-risk, but the definition of a high-risk client varies depending on the insurance company.
In general, you can be declined for life insurance if your physical health is poor and you are suffering from a major health condition, such as diabetes and obesity.
Other than that, you might be denied coverage if you have a history of mental health issues and a bad driving record.
10 Common Reasons To Be Denied for Life Insurance
In this article, you will find out the reasons you were declined for life insurance and what you can do to increase your insurance score. Check it out!
#1. Your Health is Poor
If you are suffering from an illness, particularly if it has been diagnosed in the last two/three years, you are likely to end up being declined for life insurance.
You can expect to get denied life insurance if you have high blood pressure, high cholesterol levels, or diabetes, among other things.
However, if you have cancer, things are a little bit different. Depending on the type of cancer you have and the stage in which it was diagnosed, your application might be accepted.
Unluckily, if you are suffering from late-stage cancer, you can also expect to get declined coverage.
Solution: Try to get proper treatment and control the medical condition. If that is not possible, go for a guaranteed acceptance life insurance.
#2. You Have a High BMI
If you are overweight, you are likely to get denied life insurance. That is because people with higher BMI tend to suffer from heart disease and other severe medical conditions at a greater rate than the general population.
Additionally, people who have a high BMI often need to take medications, which can also be expensive. Life insurers take this into account when calculating whether you are a high-risk client and decide whether offering coverage to you is going to pay off.
To increase your chances of being accepted for life insurance, you should try to lower your BMI before going through the application process.
If you have been diagnosed with a health condition related to your weight, you might want to see a doctor and try some alternative treatments.
Solution: Try to lose weight as quickly as possible. Besides, you can apply for life insurance for obese/overweight people.
#3. You Have Mental Health Issues
Life insurers can decline an insurance application if you have been diagnosed with a mental health problem, mainly if you have been treated in psychiatric facilities for a long time.
Psychiatric treatments can be expensive, which makes insurers see people who have been treated for mental health problems as high-risk clients.
To increase your chances of being accepted for a life insurance policy, you should try to stay away from psychiatric treatments and look for alternatives.
If you have been diagnosed with a mental health problem, it is a good idea to talk to your doctor about it and see if any alternative options will allow you to avoid going to a psychiatric facility.
Solution: As a last resort, you can try to buy a short-term policy that is only valid for a year or two.
#4. You Have a Criminal Record
If you have a recent criminal record, you are likely to end up being declined for life insurance. Whether you are accepted or not depends on the nature of your criminal record. If you have committed a serious crime, you shouldn’t expect to be accepted for most policies.
However, if your criminal record is a minor one, you might still have a chance of getting accepted by some companies.
If you have been charged with a misdemeanor and you didn’t spend time in prison, you might be able to try your luck with an insurance company. Keep in mind that even minor criminal records can scare off some companies, but not all of them.
Solution: You have to wait a few more days to apply again, find more here.
#5. You Are Too Old
In general, older people are viewed as high-risk clients, as they tend to develop serious health conditions, such as cancer and Alzheimer’s disease, at a much higher rate than younger people do.
On top of that, older people often have a history of health problems, and they might be suffering from diseases that they haven’t been diagnosed with yet. Such conditions can be extremely expensive to treat, and life insurers don’t want to take the risk.
This means it is harder for older people to get accepted for life insurance unless they can prove that they are healthy and fit enough to merit coverage.
Or in other words, you should try getting life insurance as soon as possible, even before you turn 40, as the rejection rate grows exponentially after that point.
Solution: Never be hopeless. We are here to help you. We are specialized in senior life insurance & burial insurance.
#6. You Have Debt
People who have debt problems might be declined for life insurance.
Why is that the case? Your life insurer will think that you are unreliable and might miss your premium payments, which is the last thing that a life insurance provider wants to be dealing with.
Also, if you were to pass away, your beneficiaries would have to deal with your debt. Some life insurers view this as a red flag and refuse to offer coverage.
To increase your chances of being accepted for life insurance, you should try to pay off all your debts, set up an emergency fund, and make sure that you have enough money to cover your monthly payments. You can also consider hiring a financial planner.
Such a person will help you reduce your debt levels and improve your credit score so that it will reflect positively on your application.
Solution: Improve the credit scope. Wait a few days and apply again.
#7. Bad Driving Record
If you have received several traffic tickets or if you have been involved in traffic accidents, you are more likely to get rejected for life insurance coverage. However, this often depends on the type of ticket/accident that you have been involved in.
Some insurance companies will treat a DUI as a serious offense, but others will make an exception if it happened a long time ago and you have been living a clean life ever since.
Similarly, if the accident happened a long time ago and it wasn’t your fault, you might have a chance to be accepted. To increase your chances of being accepted for life insurance, you should try to avoid being involved in traffic accidents and pay extra attention while driving.
Solution: Pay for the previous tickets and drive carefully next time. Apply again after a few months.
#8. Risky Occupations
Some occupations are risky and dangerous.
Life insurance companies are reluctant in approving policies for people working in these deadliest jobs.
- Airline Pilots & Flight Engineers
- Construction Laborers
- Drivers/Sales Workers & Truck Drivers
- Installers & Repairers of Electrical Power-line
- Farm & Ranch Workers
- Managers in Agricultural Outlets
- Fishermen and Related Fishing Workers
- Logging Workers
- Roofers, And
- Workers in Structural Iron and Steel Industry.
Solution: Most employer provides mandatory group life insurance who are working in these risky occupations.
However, if that’s not sufficient, you can find insurers who are offering policies to these risky jobholders.
#9. Previous Declines of Application
Modern technology allows companies to share relevant records for the application. Your information stored in the Medical Bureau is not that confidential.
The purpose of this type of service is to warn insurance companies of applications containing wrong information.
Solution: Submit again and 100% correct information.
#10. Limitations of Income
An applicant whose income does not reach a certain level will be denied. That level varies depending on insurance companies.
If your income is low, it is a hindrance to approval as the insurance needs to justify your policy.
Solution: You can always get low-income life insurance, read this.
In Conclusion
Most people think that receiving a denial letter is a challenging and stressful situation. However, you need to understand that it is not the end of the world and that you still have a chance to get accepted by an insurer in the future!
The key to getting accepted is to be honest when applying for coverage and to maintain good health. Try to avoid engaging in risky activities, live a healthy lifestyle, and do your best to keep a good credit score.
Moreover, shop around and check out a few different insurance companies in your area. It is always advisable to compare quotes from at least three different insurers before you settle on one.
You might be surprised by how additional the terms and conditions are among the other insurers!
