Life insurance in most cases is an underwritten product for risk. There are numerous factors that are considered. Some include age, build, health conditions, lifestyle and even occupation can factor in to calculating the risk when one may die. If the actuary feels the risk of claim is higher than an affordable premium can be charged then the policy is denied. There are guaranteed issue plans available for a lot of situations but benefits are usually limited.
Renwanz Insurance & Financial Solutions, Carlsbad, CA
The majority of life insurance denials are a result of something found in the paramedical exam from the applicant's blood or urine test or medical history that is outside the life insurance company's standards. These "standards" can vary a bit from one company to the next. The insurance company is all about "risk" and if they see something they believe is significant, they may deny coverage. Another option they have is to "rate" the individual below what they call "standard" and that move by them would make the cost of insurance more expensive for the applicant because the insurance company sees that individual as a higher risk. There are other reasons as well which include driving record (2 DUI's can be trouble here), repeated risky activities such as travel to what they consider dangerous destinations in the world, non-sanctioned vehicle racing (cars, motorcycles, etc) and others. One of the best ways to help avoid a denial of life insurance coverage is to work with a knowledgeable life insurance agent who, based on your complete medical history disclosed in advance of the application, will help determine which life insurance company could be the most forgiving for your particular situation. The underwriting process for life insurance can be appealed and if you are working with a knowledgeable agent, they may be able to help get the denial reversed.
There are many reasons that people can be denied life insurance, but unfortunately, people sometimes get denied for reasons that could have been avoided. Avoidable declines are often due to agents who do not do a thorough job in asking questions of their clients before applying. But denials can also be a result of clients who lie or hide information, hoping to pay a better price. Most often, clients simply do not think that something matters (e.g. bankruptcy), or are not aware of what is in their medical records (e.g. CHF instead of high blood pressure).
Ironically, one would think that the simplified issue policies that you apply for by mail would be the simplest to get, because they have the least questions and no exam to trip you up. But I find that these are a source of many declines, due to their ambiguous wording, or people not taking the time to read the instructions well.
I have been writing mostly impaired risk life insurance online for over 10 years, so have written thousands of policies for people with health conditions. But just when I get to feeling good about so many cases getting approved as I quoted, I will get hit with a decline out of left field that I did not see coming. Sometimes, it just seems impossible to avoid them. But a good agent should not have a lot of them, or they are not probably doing their job as they should.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
This is a delicious question because so many people are denied coverage. The irony here is that many of these declinations could have been approvals. How? Here are the three reasons why people get declined for coverage:
1) They applied with the wrong carrier. Different underwriters have different levels of expertise with regards to different underwriting risks. Some are strong with cardiac cases; others are strong in respiratory cases; others are strong with hobbies like piloting. If you present a certain risk with which an underwriter does not have a comfort level, he will either decline you, or slam you with extra premium.
2) The broker did not represent the candidate sufficiently. Many times eligibility for coverage is up to debate. Problems can occur with regards to verbal disclosures; medical records; lab results; and many other factors in underwriting. These problems can often be resolved if the broker has sufficient expertise, negotiating skills, and leverage with the carrier. If not, then the applicant could be declined unnecessarily.
3) Deal-breakers. Sometimes, people just are not eligible for coverage. If you did cocaine yesterday, and want $2million of coverage today, you will be out of luck. If you have stage four cancer, unfortunately, you might end up with some burial insurance and nothing more. The good news here is that with the proper coaching from your broker, you could qualify for life insurance at a future point. The broker should be able to detail for you exactly what circumstances have to be in place to do so.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
If you're uninsurable for traditionally underwritten programs (full underwriting with an exam, non-medical, simplified issue, etc.), you always have the option for guaranteed issue whole life insurance. These products are typically your last resort insurance. They generally feature the highest rates because there are no medical questions and no exams to complete. The face amount for coverage is generally limited to a maximum of $25,000 and the policies will come with a "graded" death benefit.
A graded death benefit is, in short, a 2 year waiting period (with most GIWL programs - some feature a 3-year period). If death occurs in the first 2 years, the premiums paid into the policy are paid out to the beneficiary (unless death is accidental, then the full benefit is payable). If death occurs after the beginning of year 3, then the full benefit will be paid out.
.JPG){kind=avatar}
Ironically, one would think that the simplified issue policies that you apply for by mail would be the simplest to get, because they have the least questions and no exam to trip you up. But I find that these are a source of many declines, due to their ambiguous wording, or people not taking the time to read the instructions well.
I have been writing mostly impaired risk life insurance online for over 10 years, so have written thousands of policies for people with health conditions. But just when I get to feeling good about so many cases getting approved as I quoted, I will get hit with a decline out of left field that I did not see coming. Sometimes, it just seems impossible to avoid them. But a good agent should not have a lot of them, or they are not probably doing their job as they should.
1) They applied with the wrong carrier. Different underwriters have different levels of expertise with regards to different underwriting risks. Some are strong with cardiac cases; others are strong in respiratory cases; others are strong with hobbies like piloting. If you present a certain risk with which an underwriter does not have a comfort level, he will either decline you, or slam you with extra premium.
2) The broker did not represent the candidate sufficiently. Many times eligibility for coverage is up to debate. Problems can occur with regards to verbal disclosures; medical records; lab results; and many other factors in underwriting. These problems can often be resolved if the broker has sufficient expertise, negotiating skills, and leverage with the carrier. If not, then the applicant could be declined unnecessarily.
3) Deal-breakers. Sometimes, people just are not eligible for coverage. If you did cocaine yesterday, and want $2million of coverage today, you will be out of luck. If you have stage four cancer, unfortunately, you might end up with some burial insurance and nothing more. The good news here is that with the proper coaching from your broker, you could qualify for life insurance at a future point. The broker should be able to detail for you exactly what circumstances have to be in place to do so.
A graded death benefit is, in short, a 2 year waiting period (with most GIWL programs - some feature a 3-year period). If death occurs in the first 2 years, the premiums paid into the policy are paid out to the beneficiary (unless death is accidental, then the full benefit is payable). If death occurs after the beginning of year 3, then the full benefit will be paid out.