What to Do If Your Life Insurance Application Is Denied?

Life Insurance is the surest way to provide financially for your family in case you should suddenly pass away. However, there are cases where insurance companies may deny someone life insurance or even a life insurance claim. Let’s consider the whys and what you can do: 

If you fall in a high-risk category, insurers may deny your application for life insurance. Health challenges, risky behaviours, a criminal record, substance abuse, and bankruptcy are all reasons for being denied life insurance. 

If you face a decision like that, keep going. First, find out from your insurance adviser or insurer the reason for the denial in case you made a mistake on the application. 

Once you confirm the results, find how you can remedy them. For example, if it is because of poor health, find out if there is cause for concern from your physician and present the facts to the insurer. The same applies if you need a credit report or updated driving record. 

Appeal the decision by submitting the updated information as quickly as possible. If you still can’t get life insurance, consider the following: 

Speak with a licensed insurance agent:

It’s straightforward to get life insurance alone. However, when you face unique circumstances, the services of a licensed insurance agent will help you apply for coverage with companies that will take on high-risk individuals. The agent will also ensure you follow the application process correctly. 

Try a different insurer:

Only some insurers have the same criteria, so try another if the first one denies your application. There are many insurance companies that focus on individuals who are considered high risk for other insurance companies, for example, Canada Protection Plan (CPP).

Consider a workplace life insurance plan:

Sometimes, your employer’s group life insurance plan can solve the problem. Even though you may have a smaller coverage, they don’t usually require a medical exam.

Try again later:

If you can improve your medical health, lifestyle, etc., and prove that you have taken the right moves, the life insurer may consider you later. 

Try a different life insurance policy:

Even a smaller insured amount is better than none, so consider getting a simplified or guaranteed issue life insurance with fewer questions and higher approval rates. 

GetCovered provides a fantastic online insurance quote system backed by Apluswealth Inc’s software. Here you can find the right insurance to protect your loved ones, no matter what!

Common Reasons for Denied Life Insurance Claims!

Compared to the claims paid by life insurers, one seldom hears of claims denied, but it does happen. Here are some of the reasons that it could occur and how to avoid it from happening: 

Not Disclosing a Medical Condition or Other Relevant Information can cause Denied Life Insurance!

As mentioned in the section above, disclosing medical conditions, dangerous hobbies, high-risk occupations, criminal offences, and other risk factors during your life insurance application is mandatory. In addition, these answers help insurers underwrite the risk and determine their rates for insuring your life. 

Suppose you fail to disclose vital information during the application. In that case, it is considered a false or misleading statement or omission of information, also known as material representation in the insurance industry.

Therefore, by withholding the truth, the insurance may approve an application that would otherwise be discharged or not charge the accurate rates. 

Furthermore, besides having several ways to verify the data provided, life insurance policies leave a two-year window (starting from the policy’s issue date). During this time, insurers have the right to query or contest a claim. So they could ask for medical records within that period to check for misinterpretations and can void the policy or deny Life Insurance death benefit. 

Not Paying Premiums 

If you haven’t paid your premiums before your death, your beneficiaries won’t manage to receive your life insurance payment. You can prevent something like that by ensuring you aren’t behind. If you owe some premiums, speak to your insurer to see how they can help you (this hinges on how far behind you are). Some companies will give an interest-free one-month grace period that covers your death. Then, if anything happens to you, your beneficiaries receive the death benefit minus the premium/s due. 

However, if a policy has lapsed, some companies may allow you to reinstate it by paying the premiums due with interest. In addition, they might require you to take a new medical exam. 

Expiring Term Life Insurance Policy

If your term life policy ends without a death benefit payout, some insurers will allow you to renew the coverage if you still require it or convert it to a permanent life policy. But, of course, the prices are higher for these. 

Death by Suicide

Nearly all life insurance policies have a “suicide clause” lasting a minimum of two years. A suicide during this period does not qualify for a payout, but the beneficiary may get the premiums paid.