Taking out life insurance is a big deal and requires a lot of shopping around. Each company seems to offer something more than the last one, and something less as well. They all have a multitude of forms to fill in, and want to know everything about your lifestyle, present and past.
That’s because each company runs their business in different ways, they have different ways to invest money and they prefer different customers. Some may prefer the stable middle age client, while others are more geared toward family packages.
It is unusual, but not unheard of to be declined coverage based on what you have put in the policy application form. This is usually because a particular answer sent up a red flag for that particular company and they decided that it would not be in their best interest to offer you coverage. Or, to put it another way, they figured that they would lose money in dealing with you.
This does not however mean that you are uninsurable. The first thing you need to do is to get in touch with the life insurance carrier and find out why they declined you coverage, ask for the specifics to be sent to your family doctor.
There are a number of reasons that you may be declined coverage :
- You are a heavy smoker
- Your job is regarded as high risk
- Your regular business travel takes you into a dangerous country
- Your favourite sport is considered too hazardous
- Your health is not perfect.
With most of those you have two choices; either change the situation, e.g. get a new job or sport, or go and look for another insurance company. The second of these options raises another problem.
The one thing insurance companies do have in common is the question on their application form; “Have you ever been declined Life Insurance coverage?”.
If the answer to this is “yes”, then you automatically raise a red flag and any insurance company is going to want to know the reason why you were declined; hence your question to the original company. You need to be able to tell a new insurance company exactly why the other one turned you down, with specifics.
You are well advised to mention the fact that you were turned down by another insurance company before you ask for an application form and see what the new insurance company says. If they say that the situation doesn’t affect their policies, then go ahead and fill out the form. If they say they will also probably decline you because of it – do not fill out any form, that would be processed and would be recorded as another declined offer.
If you really cannot find another company that will cover you at an affordable premium, then you are going to have to look at changing the situation.
In most cases if the situation that caused you to be declined in the first place has been removed for more than a year it will no longer affect you and available coverage. For example if you were declined for being a heavy smoker, but have since given up for more than a year, most companies will not worry about the previous refusal of coverage.
When the situation is medical; you have a condition that the initial insurance company thought was too severe to allow you coverage, you are going to need medical proof that the condition has been removed or lessened before approaching another insurance company. You will also probably need a medical examination by a doctor nominated by the new insurance company to satisfy their acceptance criteria.
Finally, if you have removed the situation and approached other companies only to be told yet again that they will probably decline you it is time to call in the experts. Find yourself a good insurance broker. Explain the situation to them, don’t hold back any facts, and let them go and find you some coverage.
The advantage of insurance broker is that they regularly deal with lots of companies, and lots of different insurance requests. So, once they have the facts from you, they will probably know exactly which insurance company will say yes to you and they will be able to set things up for you.
In summary, every one should be able to get life insurance from somewhere. The premiums may vary, but the coverage is out there somewhere. Being declined by one insurance company doesn’t exclude you from being able to get coverage. In fact, it might act as a wake up call to you and nudge you into changing your lifestyle a little, just to get that premium down.