When you’re trying to do the responsible thing and protect yourself and your family by applying for life insurance, it can be discouraging to get a rejection letter. Now what?
If that happens, don’t panic. Just because one life insurance company has denied your application does not mean that you will never be able to get life insurance. Life insurance companies use a process called underwriting to determine premiums and eligibility, so being rejected by one company does not mean all companies will reject you. Just like you would look at different mortgage options, you can shop around for a life insurance policy that will work for you.
There are options if you have been denied life insurance. Here are a few things you can do to make sure that you get the life insurance coverage you need for yourself and your family.
Review Your Application
The first thing to do if you find out your life insurance application has been denied is to find out why. Reach out to the insurance provider for more information, as this can provide insight into your situation for future applications. Common reasons to be denied life insurance include:
- Chronic illness and pre-existing conditions – Your chances of being accepted for a life insurance policy will increase if you show that your illness is being treated through medication and lifestyle changes.
- Lifestyle factors – If you have a history of alcoholism, drugs, smoking, or reckless behaviour, this can cause your life insurance premiums to increase, or you can be rejected altogether.
- Age – The older you are, the more difficult and costly it is to get life insurance.
- Lying or withholding information – If you intentionally leave out vital information on your life insurance application, the insurance company can reject your application altogether.
Make Lifestyle Changes and Reapply
Once you know why your application was denied, you can form a plan to get life insurance. Something you can do is wait, especially if lifestyle was the main issue with your life insurance application. This can be difficult and sometimes risky, but if you use the time wisely, there is a chance that you can be approved for life insurance when you reapply.
Give yourself six months to a year before reapplying for life insurance. In the meantime, be proactive about making positive changes to your lifestyle. This could mean quitting smoking or drinking, losing weight, or taking medications to lower your blood pressure or cholesterol. Since you are not paying into a life insurance policy, take the money you would otherwise contribute and put it in a savings account to give you peace of mind should there be an emergency.
Check for Workplace Life Insurance
If there is no chance that a bit of time will change the outcome of your life insurance application, then you can look to see if your workplace offers a group life insurance policy. Each workplace is different, but most life insurance group plans will cost you very little or nothing at all. You are entitled to them without a medical exam despite pre-existing conditions or dangerous lifestyles.
Here’s the catch: A group plan will usually not give you as much life insurance as you may want or need. Having 10-12 times your income in life insurance coverage is recommended, and a group policy will likely not give that much. If possible, try to supplement your life insurance policy or get extra through your work. And remember, if you leave your job, then you will lose that policy.
Explore Alternative Life Insurance Products
Just because you have been turned down for traditional life insurance does not mean there are no other options. No Medical and Simplified Issue Life Insurance offers options for permanent life insurance (coverage for life) or term life insurance (coverage for a pre-determined length of time – usually 10, 20, 25, or 30 years) without a medical exam. This makes it an excellent option for those who have been denied life insurance or do not want to submit to a medical exam for various reasons.
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