Top 15 Reasons You'll Get Declined For Life Insurance
These are in no specific order, since the importance of each will vary from one life insurance company to another.
1. Overweight or Obese. These are a red flag for life insurance companies because they are conditions that often lead to severe health complications, particularly cardiovascular issues. In addition, your weight -- or more specifically your height-to-weight ratio -- is also a strong indication of your overall health and fitness level.
While being overweight or obese may not always be a cause for a decline in and of itself, it will usually result in higher premiums. And if it exists in combination with other health risks, a decline is highly likely.
2. Income Limitations. Some life insurance companies won't write a life insurance policy for someone whose income is below a certain level. That level will vary between insurance companies. The reason that they impose this restriction is that they don't want to insure people below a certain income level, since it can result in issuing a large number of small policies that produce reduced premium flows. The companies see this as a method of cost containment.
Another reason that lower income can impede your approval is that the insurance companies have to justify the policy. If you want a million dollar life insurance policy but have no assets and make $20,000 a year. There is a good chance that you won't receive coverage.
3. Alcoholism. This isn't about casual drinking, but more about a positive alcohol marker indicated when liver functions are high. The combination of damage to health that occurs from alcoholism, as well as the potential for engaging in life-threatening activity is enough for many life insurance companies to issue a denial.
If alcoholism is a current problem, the best strategy in applying for life insurance will be to delay your application until you have ceased drinking, and enough time has passed that the claim of being sober can be substantiated.
4. Elevated Cholesterol, Lipids and Triglycerides. The main concern here isn't necessarily high cholesterol, but rather the combination of high LDL cholesterol, and low HDL cholesterol. The combination puts you at higher risk for heart disease and stroke.
5. Elevated Liver Function. Elevated liver function can indicate inflammation or damage to the liver cells. This can cause the cells to leak above normal levels of certain chemicals into the bloodstream. Most typically, the elevation is mild, and the condition is temporary. But sometimes it can be an indication of more serious liver problems, and that's what concerns life insurance companies.
One of the difficulties for an applicant, is that they may become aware of the elevated liver function only after taking a life insurance medical exam. In that case, there's no way to know if the condition is temporary or something more serious, since you haven't had the opportunity to get follow-up medical attention. The life insurance company however may assume the worst and deny your application.
6. Blood or Protein in the Urine. From a life insurance standpoint, the existence of blood or protein in the urine could be an indication of kidney disease. But it can also be caused by extreme physical exercise. In either case, there is no way to know unless you have follow-up medical treatment. But that won't help you in connection with a life insurance application, unless the insurance company is prepared to wait for the additional medical information before proceeding with your application.
7. Hazardous Occupation. Some occupations carry a higher degree of danger than others. This can make life insurance companies reluctant to approve policies if you are working in an occupation that is considered particularly hazardous.
Forbes magazine produced a list of The 10 Deadliest Jobs:
- Logging workers
- Fishers and related fishing workers
- Airline pilots and flight engineers
- Structural iron and steel workers
- Refuse and recyclable material collectors
- Electrical power-line installers and repairers
- Drivers/sales workers and truck drivers
- Farmers, ranchers, and other agricultural managers
- Construction laborers
8. Hazardous Extra-Curricular Activities. For some people, it's not what they do for a living that gets them in trouble with life insurance companies, but rather what they do when not working. Just as some occupations are more hazardous than others, there are also extracurricular activities that are considered hazardous, and carry a higher risk of premature death. If you participate in any of them, you may find it difficult to get life insurance.
Exactly what extracurricular activities are deemed hazardous varies considerably from one life insurance company to another. But some of the more common ones include skydiving, scuba diving, flying (recreational pilot) and base jumping. Though you may see these activities is entertaining, a life insurance company may consider them to be unacceptably dangerous.
9. Drug Use. Though marijuana use is slowly gaining acceptance among life insurance companies due in no small part to the fact that it is being legalized in more states, confirmed use of stronger drugs are typically an automatic decline when you apply for life insurance.
Just as is the case with alcoholism, if you have a drug habit, the best strategy is to get off the drugs, and to begin establishing a history of a drug-free life. In most cases, this will take up to three years.
10. Your Driving Record. Much like participating in hazardous extracurricular activities, a spotty driving record can indicate that you live a dangerous lifestyle. This is not to be underestimated, as auto accidents are one of the leading causes of death, and especially prevalent among young people.
A history of multiple accidents or tickets, or certainly of repeated DUI/DWI episodes is a cause of concern for a life insurance company. You may find it impossible to get life insurance until you can demonstrate a reasonable history of clean driving.
11. A History of Cancer. Even though cancer outcomes have been improving dramatically in recent years, life insurance companies continue to see cancer as a high risk situation. Much will depend upon the type of cancer that you had, how far it progressed, and how long it's been in remission.
Less serious forms of cancer, such as skin cancer, are typically approved by life insurance companies. The more severe forms, such as breast cancer, may receive more scrutiny.
12. Previous Declines on Life Insurance Applications. You can blame the Medical Information Bureau for this problem, but life insurance companies subscribe to this system, which enables them to share information on approvals and denials with other insurance companies. The main purpose of the system is to alert insurance companies about applicants who lie about their health conditions. Such applicants often go from one insurance company to the next, hoping to be able to pull off the big lie, and get they policy they want.
But it can also be a snare for anyone who has applied for life insurance in the past, and has been declined for a medical reason that may no longer exist. It's important to understand that just because you've been denied for a life insurance policy the past, doesn't mean that you can never be approved by any other life insurance company.
13. AIDS or HIV. Even though AIDS and HIV are better understood now than in the past, and even though survival rates have improved dramatically, some life insurance companies still see them as red flags and may deny your application. But there are companies out there that will provide life insurance, and those are the ones that you need to apply to.
14. High Levels of Glucose or Blood Sugar. High levels of glucose or blood sugar can be an indication of diabetes, and that opens up the possibility for a host of other medical outcomes that many life insurance companies prefer to avoid.
This is another one of those conditions that often is not discovered by the applicant until they undergo a medical exam for life insurance. This is because high levels of glucose or blood sugar usually have no symptoms, especially in the early going.
15. Hepatitis. Hepatitis B or C that has already been diagnosed and treated is typically not a reason for denial once treatment is complete. But it can be a problem with a life insurance application if the condition has only been recently discovered, or if it is revealed by the life insurance medical exam itself.
In order to get life insurance, you'll first need to begin some sort of treatment, which could make you eligible for life insurance approval at a later date.
What Are Your Choices If You Are Declined For These or Any Other Reasons?. The point of this list isn't to tell you why you can't get life insurance, but rather to provide the most common reasons for denial, and more important -- what you can do about it.
The first step is to find out the specific reasons for the denial. Be sure to get this information in writing, as it may be very specific, and list more than one reason. You'll need this information in order to determine your next course of action. That usually involves applying to another life insurance company. But you shouldn't do that until you know what the denial reasons are, so that you can avoid a repeat denial.
Get copies of your medical records. Order copies of any medical records that were used by the life insurance company in declining your application. You'll need to check these records carefully to make sure that they do not contain false or questionable information. Should you come across any, you'll need to make sure that the information is corrected, as it will appear in the database that virtually all insurance companies have access to.
Work with an Independent Insurance Broker. This is probably your most important strategy. There are literally hundreds of life insurance companies, and each takes a somewhat different view of various health conditions. Where one company may deny you, another may approve your application and welcome your business. For example, some life insurance companies take a more favorable view of smokers than others.
The trick, if you are a smoker, is to apply only to those companies that have a favorable view of smoking and will give you more affordable life insurance rates. But since you do not work in the industry, you can't know who those companies are. An independent insurance broker will know who they are because he works in the industry. And because he employed by any one company, he can place your application with any company that is likely to approve it.
That will save you time and money -- because it won't cost you any more to use an independent insurance broker than it will if you applied to a life insurance directly on your own.