scuba divers

6 Reasons You’d Get Turned Down for Life Insurance

The most common reason that people get declined for life insurance coverage is because they have a specific health condition, but it isn’t the only reason. I’d like to cover the top ones and let you know what your options might be.

1. You have a specific health condition. For example, someone who has cancer or has had a heart attack recently might get declined for a traditional life insurance policy. There are, however, people who get declined for life insurance for health reasons simply because they applied with the wrong insurance company.

Not every life insurance company deals with high-risk life insurance, so if you do have a health condition, such as diabetes, I recommend that you work with a high-risk life insurance agent that can help figure out what the best course of action is to get you approved for life insurance. If you can’t get approved for a traditional policy, there might be alternatives, such as a graded death benefit policy.

If you travel internationally, or live abroad for a certain time of the year, some insurance companies will not want to insure you.

2. You participate in high-risk activities. While most insurance companies will insure scuba divers, for example, it all depends on the type of diving you do (open water vs cave diving), the amount of times you dive a year, where you dive and how deep you dive.

If you travel internationally, or live abroad for a certain time of the year, some insurance companies will not want to insure you. Actively deployed military personnel may have a hard time getting approved for insurance, unless you are working with specific insurance companies.

3. There are specific financial reasons. To get approved for life insurance, there has to be financial justification. For example, someone earning $25,000 per year would most likely not qualify for a $1,000,000 life insurance policy, since you can typically get coverage of anywhere between 10-30 times your annual income, depending on your age. If you don’t have an income, but your spouse does, you can typically get as much coverage as your spouse. If you don’t have income and can’t financially justify the need for life insurance, you might get declined for a life insurance policy.

4. You’ve filed for bankruptcy. If you’ve filed for a Chapter 7 bankruptcy, you will typically get declined for coverage until the proceedings have been discharged for at least 12 months. If, however, you are in the midst of a Chapter 11,12 or 13 bankruptcy proceeding, you might be able to qualify for coverage if you are making regular debt payments.

5. You’ve had a DUI (driving under the influence). If you have had more than three DUIs in the last 10 years, every insurance company would decline you. However, if you have one or two DUIs over the last 10 years, some insurance companies will decline you while others may not. If you have been declined due to a DUI, it is possible you applied with the wrong insurance company.

If you currently abuse drugs or alcohol, you will get declined for life insurance. If however you have been drug free for three years or more, or have stopped abusing alcohol for over two years, you should be able to get approved for a life insurance policy.

6. You have a criminal record. The difference between an approval and a decline is typically dependent on a couple of factors. First, how long it has been since you were convicted, and second what kind of conviction it was. If you have had multiple felonies, you will likely get declined. If, however, you have had one felony, or one or two misdemeanors, you might be able to get approved for coverage, depending on how long ago your probation ended.

If you find yourself in any of the above situations, working with a high-risk life insurance specialist is the key to your best chance of getting approved for life insurance.

  1. It is important for life insurance agents to discuss with their clients beforehand any complications that could effect the offer from the life insurance company. Once a company denies a client it automatically ends up with the Medical Information Bureau (MIB) which would effect any opportunity to purchase life insurance later on. I always talk with my clients and if there is something I am unsure of I do an informal application and shop the case around and then go through that company. Always shop carriers as different companies specialize in different scenarios.

    1. Regarding MIB, your sentence: Once a company denies a client it automatically ends up with the Medical Information Bureau (MIB) which would effect any opportunity to purchase life insurance later on, is inaccurate.
      Carriers decisions are not based on the MIB info. MIB is used only to share underwriting information. If they see a medical history on MIB that they do not see in their files, then they will ask to re-question the client or they will request code details. Carriers do not report their final underwriting outcome to MIB, ie declines..etc.

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