It can be discouraging to receive a rejection letter when you’re trying to do the right thing and protect yourself and your family by applying for life insurance. What’s next?
In that case, try not to freak out. You won’t always be able to get life insurance, even if one life insurance company has turned down your application. Because underwriting is used by life insurance companies to determine premiums and eligibility, being rejected by one company does not guarantee that you will be denied by all of them. You can shop around for a life insurance plan that works for YOU just like you would compare different mortgage options.
If you were turned down for life insurance, you still have options. Here are some steps you can take to ensure you obtain the life insurance coverage you require for yourself and your family.
Review Your Application
When your life insurance application is rejected, the first thing you should do is find out why. Ask the insurance company for further details as this will help you better understand your situation for future applications. Typical grounds for denial of life insurance include:
- Chronic sickness and pre-existing conditions: If you can demonstrate that your disease is being managed by medicine and a change in lifestyle, your chances of being approved for a life insurance policy will increase.
- Lifestyle factors: If you have a history of using alcohol, drugs, smoking, or acting recklessly, your life insurance premiums may go up or you may even be turned down. Getting life insurance becomes more challenging and expensive as you get older.
- Lying or withholding facts – The insurance provider may completely reject your application if you knowingly omit crucial information from your life insurance application.
Make Lifestyle Changes and Reapply
You can create a plan to purchase life insurance once you understand the reasons your application was rejected. Waiting is an option, particularly if your lifestyle was the primary problem with your life insurance application. This can be challenging and occasionally dangerous, but if you make the most of the time, there’s a chance your next application for life insurance will be accepted.
Before resubmitting a life insurance application, give yourself six months to a year. In the interim, take the initiative to alter your way of life for the better. This can entail giving up alcohol or tobacco use, dieting, or taking drugs to decrease cholesterol or blood pressure.Instead of paying into a life insurance policy, put the money you would have invested in one into a savings account instead. This will give you peace of mind in case of necessity.
Check for Workplace Life Insurance
You can check to see if your employer offers a group life insurance policy if there is no danger that passing time will affect the outcome of your life insurance application. Despite the fact that every business is different, the majority of group life insurance plans cost very little or nothing at all. Despite pre-existing diseases or risky lifestyles, you are entitled to them without a medical checkup.
The downside is that a group plan typically won’t provide you with as much life insurance as you may need or want. It is advised to have life insurance coverage equal to 10–12 times your annual income, and a group policy is unlikely to provide that much. Try to add to your life insurance coverage if at all possible, or earn more money via your job.Also keep in mind that you will lose this protection if you quit your employment.
Explore Alternative Life Insurance Products
There may still be alternative possibilities available even if you were denied traditional life insurance. No Medical Problem; Simple Problem Without requiring a medical exam, life insurance provides alternatives for permanent life insurance (coverage for all of one’s life) and term life insurance (coverage for a specific number of years, typically 10, 20, 25, or 30 years). This makes it a great alternative for people who have had their life insurance application declined or who, for a variety of reasons, do not want to undergo a medical exam.