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Life insurance companies take the underwriting process very seriously because they are taking on a lot of risk when they approval each and every application for coverage. Underwriters will order your medical records, review the results of your medical examination, and compare all of this information to the information provided on your application. During the assessment, the underwriter will determine whether or not you qualify for coverage and what health classification you should be given. If the applicant is in poor health, or they are considered too much of a risk to insure based on their lifestyle, there is a chance that they will be declined by the life insurance provider.
If you have been declined for coverage, it is important for you to know what steps to take after the declination. Just because one insurance company is not willing to extend you an offer for coverage does not mean that you should panic. You may still be insurable and the key to finding coverage is knowing what companies cater to riskier applicants. Read on and find out what you can do to uncover the reason you were declined, and what you can do to qualify for coverage from another life insurance provider.
Declined for Insurance When You Are in Good Health
Your health is not the only factor an insurance company will use to determine whether or not you are insurable. While pre-existing conditions can affect your ability to find coverage, there are other mitigating factors that can contribute to a declination. Insurance is all about risk and life insurance is all about calculating your mortality rate. If you are healthy but you participate in hazardous avocations, your mortality rate may be much too high for the insurer’s liking.
Some hazardous avocations that can easily get you declined for life insurance include: scuba diving, flying, rock climbing, skydiving, base jumping, and even dangerous occupations like mining. While not all companies will deny you for all of these activities, some will. If you are declined because you are too much of a thrill seeker, you may have the option to exclude the activity from the policy or you may have to pay a fixed rate with another provider. Exploring your options is key in this situation.
Declined for Insurance When You Have Medical Conditions
More often than not, an application for life insurance is declined because of the applicant’s health status at the time the application was submitted. This can either be due to the information that was discovered in the medical records, the information provided on the application, or because of the results that came back from the lab work taken during your physical exam.
If you know about the medical condition that led to your declination, you may have been expecting to receive the letter in the mail. This is why it is important to speak with an experienced life insurance broker so that you apply through a carrier who is open to accepting a client with your condition, as long as your condition is controlled.
If your labs came back and they were the cause for your denial, you may be shocked to hear that your labs came back abnormal. In this case, you will need to see your physician to discuss your labs. You may need to be retested to see if there was a mistake. If there was, you can have your labs sent to the company for review and show that you are in good health. If the labs were accurate and you are diagnosed with a medical condition, it is important to focus on controlling the condition before you apply for coverage. After all, insurance companies will approve applicants with medical problems as long as they comply with doctors’ orders and control the issue with treatment.
Steps to Take After Being Declined
You should take action when you are declined for life insurance. Here are some steps that you can take to get the approval you are looking for:
1. Uncover the Reason for Denial
All insurance companies are required to send you a letter explaining why you have been denied for coverage. Review the reason(s) first, and you can take the steps to get approved when you reapply with another company.
2. Check Your Records
You sign an authorization for the underwriter to pull your medical records. Order these records, ask for your test results, and take this to your doctor to ensure everything is accurate. If there is a mistake, it must be fixed. All insurance companies will be able to see the reason for denial in a central database and this could prevent you from getting approved in the future.
3. Work with a Broker
Once you uncover the reason and you fix errors, you should work with a broker to find coverage. Brokers know which companies are more likely to approve you based on your health and your lifestyle, and they can help guide you. Lifestyle choices will effect your insurability. From cigar smoking to sky diving and rock climbing there are companies who specializes in finding higher risk individuals the coverage they need at a price they can afford.
Make sure you do not panic when you are declined for life insurance coverage. Review quotes from various companies, find out the requirements of companies before you apply, and understand all of your options.