Life insurance companies have the luxury of picking and choosing who they'll cover and who they'll refuse coverage. Before you apply for life insurance, you should learn about the most common reasons that life insurance applications are declined. Below are a list of 7 common reasons you'll be denied life insurance and how you can work around them.
Health Issues. We realize that "health issues" can mean millions of different things, but each company has their own guidelines on what conditions are considered acceptable for life insurance. The most common conditions that will cause a company to decline your application include: cancer, HIV or AIDS, diabetes, hepatitis, kidney disease, problems with your liver, elevated cholesterol, lipids and triglycerides, heart disease, stroke, COPD, sickle cell anemia, and heart attack.
If you have or have had any health conditions, it does not mean that you should lie on your application or that you can never get life insurance. Some companies will accept your application if your condition is under control or if it's been some time since the condition occurred. If that doesn't apply to you, you may have to shop around for a company that is willing to accept clients with your condition or that offers guaranteed coverage, which means you can qualify for coverage no matter what health conditions you have.
Previous Declines. Many life insurance companies will pull an MIB report (Medical Information Bureau). This report will show if you've applied for life insurance before and what medical conditions you listed when you applied. It will also show if you were denied. Companies do this to deter people from lying about health conditions on a policy if they've previously been denied a policy because of their health.
This does not mean that you can't get life insurance if you've been declined before. It simply means that you should be honest about your medical history and previous applications for life insurance. As long as you have been truthful on your application and meet all of the other requirements on the new application, a previously declined policy should not be a problem.
Weight. Almost every life insurance company has a height/weight chart that shows the maximum weight they'll accept for a person of your height. Some charts have different weight requirements for men and women. In rare cases, some companies will also have a minimum weight requirement to make sure the client isn't underweight, which could be an indication of an eating disorder. These requirements are in place because people who are overweight or underweight are at risk for health conditions, and companies don't want to insure clients with significant health risks.
Alcohol or Substance Abuse. Most companies will decline your application if you've abused alcohol, illegal drugs or prescription drugs in the past five to ten years, depending on the company and what substances were taken. If you have been through treatment and have been clean for two to five years, you may be able to qualify for coverage as long as your health has not severely declined.
Hazardous Occupation or Hobbies. If you're into motor sport racing, boat racing, skydiving, hang gliding, mountain climbing, scuba diving, cave exploration, boxing or mixed martial arts (or similar activities) you could be denied life insurance. Also, if you're a pilot or fly as an airline crewmember you could also be denied coverage. The good news is that there are many companies that are willing to work with you - you'll just have to find the right one. Just be aware that you may be considered "high risk," so your premiums could be slightly higher.
Bad Driving Record. If you've had more than three moving violations (like speeding tickets, car accidents, etc.) in recent years or if you have more than one DUI, you'll have a hard time getting approved for life insurance. If your driving record doesn't look so good, the best you can do is drive as carefully as possible and apply for life insurance one to two years after your last violation. If you're unsure about whether or not your driving record could be forgiven by a life insurance company, talk to an agent to figure out what they consider acceptable and uninsurable. The good news is that you can get coverage eventually; you may just need a little time to be more cautious on the road.
Low Income. Each life insurance carrier has their own limits regarding a client's income, but a general rule would a household income (combined income from you and your spouse or domestic partner) of $30,000 per year. If your household income is lower than that, it is possible for you to get a small insurance policy, but again - you'll have to find the right company.
What can I do to get approved for life insurance?
If you have been denied life insurance or believe that you could be for any of the reasons listed above, you need an agent who represents more than one company and is familiar with which companies will work best in your situation.
Fortunately, Family Protection Center works with over a dozen life insurance carriers and our knowledgeable insurance professionals can help you find a company and a policy that will suit all of your needs. You don't have to waste your time hunting for a company that will accept your application, just contact Family Protection Center! Our representatives are waiting to hear from you, so give us a call or fill out the form on this page. We'll be happy to help you get your application approved.
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