What to do if your life insurance application is denied

Life insurance is a big decision, but even after choosing a policy, an application may be denied if the company decides you’re not a good fit for their product.

Being denied is fairly common when circumstances surrounding your life, such as increased risks, leave a life insurance company not wanting to take a chance on representing you. Luckily, there are a few options for answering the golden question of how to find a life insurance policy and plead your case with a company after a denial.

Common Reasons for Denial
Every life insurance company will have its own reasoning for approving or denying an applicant’s life insurance application. Just like any other insurance sector, life insurance is a business, and companies will assess your medical risk through underwriting. After this process, some will refuse to take on riskier individuals to avoid early payouts or excessive payouts.

Generally, the reasons for the denial are based on a few factors at the time of application, including:

• Smoking
• Alcoholism/Addiction
• Unhealthy BMI or obesity
• High Cholesterol
• Diabetes
• Cancer
• Asthma
• Heart Disease
• Hazardous Occupation
• Age
• Previous Denials

How to find a Life Insurance Policy After Denial
A life insurance application denial can be frustrating, but it is not the end of the world. There are plenty of options for coping after denial, including shopping for a new plan or adjusting one’s lifestyle to reduce risk and improve chances of approval.

Look for Inclusive Life Insurance Policies
Few life insurance companies will offer policies or approve applications without an exam to ensure you’re in good health. In the case that you have a critical illness or a risk factor that increases your chances of premature death, then a no-exam policy can be a great choice. Keep in mind that no-exam insurance plans typically have higher premiums which means more costly payments to maintain the policy.

However, if you have one or more risk factors, it may be the best option, despite the increased cost. While there is no exam to ensure top-notch health prior to taking out the life insurance policy, the insurer will usually ask for a health assessment via survey to better understand one’s overall standing.

A look at one’s background and collecting survey answers is usually known as a simplified issue policy, but the other option is guaranteed issue coverage which includes no-questions-asked coverage — but can come at a higher price.

Make a Lifestyle Change
If higher costs are out of the question, consider making a lifestyle change that renders you “healthier” in the eyes of an insurance company as outlined by the health insurer. Quitting smoking, adopting healthier eating habits, or moving your body to lower numbers like BMI or blood pressure and blood sugar levels may help an insurance company to reconsider any previous denial based on those factors.

Opt for an Alternative
If a life insurance policy from a primary insurer is denied, you may be able to tack on a life insurance extension to other plans you already own, or one’s that offer targeted funds in the event of one’s death, such as a mortgage life insurance.

With these types of plans, the funds would be directly applied toward your mortgage, so if a provider dies, they know their mortgage will be covered at a minimum. This policy and similar ones usually don’t require any sort of medical exam, which can make them a viable choice.