What Are the Most Common Reasons Insurers Deny Life Insurance Applications?

Keep reading to find out the different reasons insurers could reject your application

When you apply for a life insurance policy, there is always the chance that your application could be rejected. Though this is discouraging to many prospective buyers, there are still ways to get life insurance even if your application has been denied.

There are a lot of different factors that insurers consider when evaluating your application. For example, they will take a close look at your age, health status, and your lifestyle to determine whether or not you are a good candidate for coverage. But, did you know that there are even more factors that the insurance companies take into account when evaluating your application?

We’re going over the most common reasons that your life insurance application could be denied to give you a better idea of how insurance underwriting works and how you can get the best life insurance policy for yourself and your family. From there, we’ll take a look at some of the lifestyle changes you can make to get the best chance of approval.

Why Do People Get Denied Life Insurance Coverage?

It is possible to get denied life insurance coverage for a number of reasons—let’s take a look!

Ask the insurance company why you were denied coverage.

When you apply for the average life insurance policy, you will be asked for a lot of personal information. In most cases, this personal information includes access to your medical records, a medical exam, and an extensive questionnaire. There are ways to qualify with no medical exam, but we’ll get to those options a little bit later.

For most term or permanent life insurance policies, you’ll be evaluated on the following pieces of information about your life and your current lifestyle. Let’s take a look at all of the different factors insurance companies consider during the underwriting process.

1. Your Age

Probably the most obvious factor that influences your ability to get life insurance is your age. The older you are, the more difficult it will be for you to get life insurance. Additionally, the longer you wait in life to get a life insurance policy, the more you will end up paying. Life insurance underwriting is heavily based on health and life expectancy, both of which are affected by your age. 

2. Your Physical Health

The next most important factor when it comes to your life insurance application is your physical health. If you have chronic health complications that affect your life expectancy, then you will have a more difficult time getting approved for a life insurance policy.

3. Your Mental Health

Just like with your physical health, your mental health has a big influence on your life, your decisions, and your life expectancy. Because of this, insurers take mental health into account before approving your application. In many cases, insurers are looking for evidence that you are taking steps to manage the symptoms of your mental health condition. However, if you have been recently hospitalized due to a mental health episode, it may be more difficult for you to get life insurance.

4. Your Lifestyle

The choices you make in your everyday life will also affect your ability to get life insurance. For example, if you regularly partake in a risky sport or activity, then the insurance company will take notice while assessing your risk as a policyholder. Risky activities include rock climbing, skydiving, car racing, and other extreme sports.

Using tobacco is another lifestyle choice that will affect the underwriting process. Smoking, vaping, or using chewing tobacco is all considered a high risk lifestyle choice and could contribute to your insurance application being denied.

5. Your Job

Just like with high-risk lifestyle habits, a high-risk occupation could prevent you from getting life insurance coverage. The types of jobs that are assessed as high-risk usually involve some form of difficult or dangerous physical labor. For example, if you currently work in the mining, logging, oil, commercial fishing, construction, or farming industries, then your job could be the reason you were denied insurance coverage.

6. Your Finances

In addition to factors that impact your health and life expectancy, the insurance company will also want to take a look at your financial history. If you have less-than-ideal credit, the insurance company will be more hesitant to provide coverage. It is also possible that you have applied for more coverage than you can afford. In cases like these, the insurance provider needs to make sure you are approved for a policy you will be able to afford based on your yearly income.

7. Your Driving History

Another major factor that some insurers consider is your driving record. Initially you may not think your driving habits would affect your ability to get life insurance, but it really does. After all, the way you drive is absolutely a contributing factor to your life expectancy. So, if you have been denied for life insurance coverage, it could be due to your driving habits.

8. Your Criminal Record

Trouble with the law also affects your ability to get life insurance. Your ability to get life insurance coverage will depend on the type of crime and the ultimate outcome. It is also important to note that you are unable to get life insurance coverage if you are currently incarcerated, are on probation, or have been charged with a felony. Should your felony charge be dismissed, you can then apply for life insurance coverage.

What Happens if I Get Denied Life Insurance Coverage?

If you do end up getting denied coverage, don’t stress! There are other ways that you can still get coverage

There is always a way to reevaluate and reapply for insurance coverage.

Getting denied life insurance coverage can be a hard pill to swallow, but it is important not to give up! If you have been denied coverage, there are a lot of different options to help you get insured. Let’s take a look at a few solutions!

Getting Covered If You Have Been Denied Due to Health Concerns

The most common reasons that people are denied health insurance are due to age or chronic health conditions. If a health concern is the reason that you have been denied, you may want to opt for no medical exam life insurance. No medical exam life insurance is one of the easiest ways to get coverage quickly. Though you still need to submit your medical records to the insurance company, getting life insurance with no medical exam will give you a slightly better change of approval. The catch is, you will have to pay more for your policy than you would have if you underwent a medical exam.

It is also useful to apply for a different policy altogether. For example, you may have been denied based on the amount of coverage or the length of your term. In this case, you can adjust your parameters for coverage and apply again.

Getting Covered if You Have Been Denied Coverage Due to Lifestyle

If you have been denied coverage due to lifestyle choices, then the easiest way to get coverage is by making some important life changes. For example, you may want to retire from extreme or dangerous sports. If you are considering switching out of a high-risk career, this is a good sign to do so as soon as possible. If you have been denied coverage based on your status as a tobacco user, then quitting tobacco will increase your chances of getting approved. Ask your prospective insurance provider about their policy for quitting tobacco use, as some will require proof of no tobacco use for 1-2 years before reevaluating your application.

Should you choose to make these important lifestyle changes, you will have a higher chance of getting approved for a life insurance policy.

Getting Covered If You Have Been Denied Coverage Due to Your Finances

Denial based on your financial situation is fairly easy to resolve. Your best chance to get coverage in this scenario is to adjust your policy amount. By applying for a smaller amount of coverage, you’ll have a higher chance of approval. If you’re still denied for a smaller amount of coverage, you may want to consider taking steps to improve your credit score and then reapplying. 

Getting Covered if You Have Been Denied Coverage Due to Driving Record or Criminal Record

Getting denied coverage based on your driving record or criminal record can be tough. If you are denied due to your driving record, the best thing you can do is improve your driving over time and apply at a later date. If you have been denied based on a criminal record or outstanding charges, you need to wait until all charges have been settled before reapplying. As far as being denied due to an existing criminal record, you can try to apply to different insurance companies to see if you can get approved. It also may be beneficial to work with a legal counselor to help you expunge prior convictions

There is always a way to get life insurance, even after you have been initially denied coverage. By following the advice in this article, you can create a plan to get insured. If you are really having trouble getting coverage on your own, you can always hire a financial advisor to help you assess your options. Life insurance is important for your own finances and for your family’s future, so you never want to put off getting the coverage you need.

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