When most people think about why someone may have been turned down for life insurance they typically think that health reasons are the reason why. While health is a major contributor to why people may get declined for life insurance, it isn’t the only reason. In this article, I’ll cover the top 5 reasons people are turned down for life insurance, and also provide tips for what you can do to get approved for a life insurance policy.
Getting Declined for Life Insurance Due to a Health Condition
The most common reason that people get declined for life insurance coverage is because they have a specific health condition that gets them declined. 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 simply because they applied with the wrong insurance company. Not every life insurance company deals with high risk life insurance, and if you applied with companies like Allstate or State Farm and they declined you, it is possible you may get approved by another company. If you do have a health condition, 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.
Declined for Life Insurance Due to High Risk Activities
If you are involved in high risk activities you may get declined for life insurance. For example while most insurance companies will insure scuba divers, 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 insurance companies that would still insure you, such as Prudential or Metlife. If you participate in high-risk activities, we can help you find an insurance company that will cover you. Contact us here.
Declined for Life Insurance for 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.
Declined for Life Insurance due to Bankruptcy
If you have 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.
Declined for Life Insurance because of a DUI
It is possible that you may get declined for life insurance with a history of one DUI or more. If you have had more than 3 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. Contact Us if you have gotten a DUI and we can help you obtain coverage.
Declined for Life Insurance with a Criminal Record
If you have a criminal history you may get declined for life insurance. Typically the difference between an approval and a decline is dependent on a couple of factors. First, how long has it been since you were convicted, and second what kind of conviction was it. 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.
Declined for Life Insurance for Drug or Alcohol Abuse
If you currently abuse drugs or alcohol, you will get declined for life insurance. If however you have been drug free for 3 years or more, or have stopped abusing alcohol for over two years, you should be able to get approved for a life insurance policy.
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.
Author: Liran Hirschkorn