There are numerous reasons as to why you could be declined life insurance. There are thousands of people who submit an application for life insurance every year and approximately over 14% of applicants get declined for the many reasons mentioned below.
It is important to note that these are in no specific order, as the importance of these can vary depending on the life insurance company that is being considered.
1. Income limitations.
Some life insurance companies refuse to give life insurance policies to individuals whose income is below a certain threshold, although this threshold varies between companies.
The main reason for this happening is due to not wanting to insure people below a certain level of income, as it could result in issuing a larger number of policies that will produce reduced premium flows. This is essentially a method of cost containment.
2. History of cancer in your immediate family.
Cancer is known for being a horrible disease that constantly takes many victims each year. Many insurance companies will take into account what type of cancer you or any of your immediate family members have or have had and what the current situation is regarding treatment.
The most severe types of cancer that have a lower mortality rate, such as pancreatic cancer and breast cancer may result in a policy being declined. Other types of cancer that are not so life-threatening,such as skin cancer, are usually more acceptable for life insurance companies
It goes without saying that some occupations involve a lot more risks than others. Some occupations often raise red flags to life insurance companies, which end up in the declining of a life insurance policy. Some of the most commonly declined hazardous occupations for insurance are:
- Airline pilots and flight engineers
- Logging workers
- Fishers and related fishing workers
- Construction labourers
- Farmers, ranchers, and other types of agricultural managers
- Structural iron and steel workers
- Electrical power-line installers and repairman
- Refuse and recyclable material collectors
- Drivers/ sales workers and truck drivers
4. Use of narcotics
Often, the use of drugs or any type of narcotics ends up in a life insurance policy being declined immediately. Drugs such as marijuana sometimes have the chance of being acceptable, but other types of narcotics are out of the question.
Avoid applying for life insurance altogether if you are using narcotics, unless you have been prescribed a mild drug from a doctor. Although marijuana can be acceptable to some insurance companies, it can also run the risk of having your policy declined.
5. Risky Lifestyle
There are many different types of recreational activities that are considered very hazardous and carry a much larger risk of ending in premature death, and life insurance companies tend to avoid these applicants.
Many activities classified as hazardous, however, are different for every company. Although some of the most common ones involve bungee jumping, skydiving and scuba diving.
We are aware that many of these activities are very exciting for many, but for a life insurance company, this is a big no when it comes to approving a life insurance application.
6. High levels of blood sugar or glucose
Glucose, better know as blood sugar, can sometimes show high levels and when this is the case, life insurance companies may see this as an issue. When approving a life insurance application, high blood sugar levels is a red flag as it could be an indication of diabetes.
Diabetes is known for advancing rapidly and creating many other different health problems and diseases. That is the reason why life insurance companies prefer to avoid these types of applicants.
7. HIV or AIDS
In recent years, scientists and medical organisations have gained a much better understanding of HIV and AIDS – with the end result being that survival rates have improved a lot.
Even though a large number of life insurance companies know this, for some,it is still a strike against an applicant and they will more than likely end up rejecting the application.
Hepatitis has two ways of working when it comes to applying for life insurance. One of them being the denial of the application if the condition has been recently diagnosed or if the applicant tried to hide it and this is discovered by the life insurance medical exam. Or two, if hepatitis has been diagnosed already and treated, in which case the chances of the application being denied are minimal.
9 High liver function
High liver function usually means that there is swelling and/or severe damage to the liver cells. If this is the case, the cells will start to release abnormal levels of chemicals into the bloodstream.
Although, in most cases the high liver function is just moderate and it will go back to normal soon enough, there can be cases in which it could be symptoms of a more serious liver problem and that is of course a big no for life insurance companies.
ost life insurance companies always take into consideration the possibility of conditions getting worse, which is why full disclosure is so important when putting together a life insurance application.
10. Declining of previous life insurance applications
When applying for life insurance, your information is often shared between life insurance companies to avoid fraud. Previous applications which have been declined will be available to potential lenders to help their decision. The medical information bureau is obligated to provide the information to check whether you misfiled information on your application to get life insurance. Whilst the company is thoroughly checking your credentials, it’s recommended to check the potential companies credentials as it was previously common for insurance companies to automatically include PPI. You might not be keen on the Bureau sharing your information, but it’s the same service which providers hospitals with details about patients.
11. Reckless driving records.
Reckless driving records are no better than the participation in hazardous activities for an insurance company and, these are huge red flags for all life insurance providers as this can indicate that you have a dangerous lifestyle.
Car accidents are one of the leading causes of death in the world, especially for young people.
It is almost an impossible task to have a life insurance application approved if you have a history of multiple car accidents, tickets, or repeated episodes of drink driving incidents.
What can I do if my application is declined for any of these reasons or any others?
The first thing you should do is gather the exact reasoning behind why your application was denied. This information will be crucial in order to know what the next step is.
With this information, you can start applying with a different life insurance company that will look at your case and maybe they will be able to assist you to get a policy with these conditions taken into consideration.
What if I have one or more of the conditions listed above? What can I do then?
In this case, we highly recommend that you look for the help of an independent agent or broker to look around and find the best life insurance company for your individual needs. Performing a medical prescreen exam is a great idea before looking for the right life insurance provider to apply with.