Here’s what to do if you’re declined for life insurance

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Nothing is guaranteed in this life, not even life insurance. If you have been diagnosed with one or more high risk conditions such as heart disease, high blood pressure, kidney failure, extreme obesity or diabetes, chances are that you are almost giving up any hope of ever qualifying for life insurance coverage.

Apart from the chronic illnesses mentioned, several factors including advanced age and bad lifestyle choices like excessive smoking will increase your chances of rejection. But there is light at the end of the tunnel.

In this article, we will explore several alternatives that are available to you if you have been declined for the regular life plans.

Take out non-medically underwritten life insurance

Unlike the standard life policies like Whole of Life or Term Life, insurers do not request a medical report or ask any medical-related questions when issuing the non-medically underwritten policy.

This is a big welcome relief for people with complicated health conditions that might have disqualified them. Non-medically underwritten life insurance covers people with severe health problems, has an easy underwriting process and faster approval after application.

The downside to it is that it can be quite expensive because the insurer does not know the full extent of your sickness and will therefore charge higher premiums to cater for the increased risks.

Even so, there are several actions that may disqualify you from non-medically underwritten life insurance;

  • Careless behavior like over speeding, drunk driving and ignoring safety warning signs
  • Self-inflicted injuries and other forms of intentional harm to yourself
  • Injuries sustained while engaging in criminal behavior         

This form of insurance is available to applicants between the ages of 50 and 80.

Consider self-insurance

Insurance is not only available through third parties. You can design an individualized support plan that carries out the same function. Self-insurance is in fact more economical than buying insurance from a third party.

Insurance companies make money by charging premiums and paying out a pre-agreed amount when a risk occurs. If you decide to insure yourself, you can easily save the money that would have been spent on insurance premiums.

In order to insure yourself, the best option is to open a taxable investment account and deposit the money you would have spent on premiums.

For example, you may open a mutual fund account and save for about 10 years. When the funds mature, you will have a decent amount and will not need to file an appeal to access your money.

Seek help from your employer

Does your employer offer group term life insurance? Apply. It may not offer you enough coverage but it is better than nothing. If you want to multiply the plan’s payout, you can choose to fund it with your own money.

Workplace insurance does not subject you to physical medical exams. This is an added advantage if you have a chronic medical condition. Some companies also grant optional life insurance, a superb alternative to non-medically unwritten life insurance.

Similar to the group plan, optional life insurance is free. If you choose to upgrade the policy you will do it at your own cost. Unfortunately, optional and group plan life insurance ends when your job ends.

Reach out to an expert

When your application has been rejected, you will receive a letter stating why you have been rejected. Your broker will receive a note too if you had applied through them.

If things have escalated to this point of rejection, we highly recommend that you consult an insurance expert who will help you review possible mistakes you made while applying.

Experts are important because they know every bit of the underwriting process which will ensure your application is approved. Unlike you who lacks the experience to find a company that will give you coverage, an expert agent will turn the market upside down until they find a policy that is just right for you.

Sometimes an agent might look at your situation and advise you not to change insurers but to simply hold on a bit longer and apply at a later date when they are confident you will be approved.

This is not the time to give up!

The fact that one insurer denied you coverage is not a reason to give up. Explore the options mentioned and find what works for you. If you have a medical condition, try non-medically underwritten life insurance.

If you have no serious condition but your application was rejected, reach out to an expert agent who will help you find out why it was rejected and will search and guide you until the right policy is found. Good luck!


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