UPDATED: Mar 26, 2020
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So, you were declined for term life insurance. It is hard not to take it personally, as it often feels like a slap in the face when you get the dreaded news that you are not worthy of a life insurance policy. But fret not my friends, for this does not mean that you are out of options when it comes to securing this all too necessary protection. Here are some ways that you can go about finding a policy that will work for you.
Fix the Problem
This may sound obvious, but so many people are reluctant to address the issue(s) that got them declined in the first place. Don’t let laziness, denial or fear prevent you from confronting the problem. There is a myriad of reasons to be declined, and most of them can be remedied in some way. Here are some examples of the most common reasons applicants are declined, and how to fix them.
- Problems with the lab test results: See your doctor ASAP and get recommendations on how to bring your lab test results back to normal. It could be a lifestyle choice or some random medication that is throwing your body out of whack. Keep copies of your progress so that you can try for policy reconsideration when your labs are back on track.
- Foreign Travel or Residency: If the number of days outside of the U.S. is the problem, then find out exactly how many days per year the insurance company will allow foreign travel to see if you can adjust your schedule to meet the requirements. If the location of the travel is problematic, you may be out of luck unless you are willing to forgo the trip altogether, or at least wait until you return to the U.S. to apply.
- Medical Conditions: Poorly controlled medical conditions will often cause a decline. This could be an indication that you are not visiting your doctor enough, or that you are not following your doctor’s orders, as your medical records may show. If you can get your medical condition under control, most insurance companies will give you a chance at a policy.
- Recent Surgery: Insurance companies want to wait to make sure that you heal up without complications after surgery. If you are declined due to a recent surgery, this is likely temporary, and you can apply again in a few months when you have healed up.
- Driving Record: Slow down, Mario! Speeding tickets and other driving violations such as DUIs are a red flag to insurance companies, as they increase your risk of accidental death on the road. Insurance companies take into consideration how many violations you have had in the past 3-5 years, so over time if you show that you can control your road rage you will gain better standing.
Try a Different Insurance Company
Just because one insurance company declines you doesn’t mean that they all will. Your insurance brokerage will be able to contact multiple insurance companies on your behalf to find one that is better suited for you. While it is true that this may not be possible for every situation, there is usually an insurance company out there who has relaxed underwriting guidelines for whatever issue ails you.
Try a Different Agent or Broker
If your agent or broker just isn’t getting it done for you, find a new one. Agents and brokers work with various life insurance companies and sometimes all it takes if finding the right one. If another agent has a company that will insure you and we don’t have that company, you should absolutely use that agent. The most important thing is for you to find coverage.
Accident-Only Life Insurance
If you have tried everything and simply cannot find an insurance company that will offer you a standard policy, you can still obtain an accident-only policy. This type of policy only pays a death benefit if the person who is insured dies from accidental causes. You may think that an accident-only policy is a waste, but just consider that accidental death is still in the top 5 ways to die according to the CDC.
Guaranteed Issue Life Insurance
There are insurance companies out there that are willing to insure anyone… for a price. These types of policies come with some stipulations, for example, one type may not pay out a death benefit if you die within the first two policy years. If you only need a small coverage amount, you may be able to afford this type of policy. However, you will likely be quite shocked at how expensive they are. Because of the cost, this type of policy should be considered a last resort.
The bottom line is that you shouldn’t give up just because you are declined by one company. Find an insurance agent or broker that is willing to work with you to find an insurance company that will give you a policy.