Why Life Insurance Gets Denied – Top Reasons & How to Fix It

If you've ever faced the stinging setback of being denied life insurance, you're not alone. Life insurance denials can seem like a complex maze, especially when you're unsure why your application was rejected.

Many individuals find themselves seeking clarity on "why life insurance is denied" and exploring possible solutions.

Whether you're a recent applicant facing rejection or anticipating a denial due to high-risk factors, it's important to understand the typical reasons behind these decisions and know your options going forward.

Guide to Understanding Why People are Turned Down for Life Insurance

Quick Review

Life insurance can be denied for several reasons, including the applicant's health history, risky lifestyle choices, or hazardous occupations.

Insurers assess the risk of insuring an individual, and factors such as pre-existing medical conditions, a history of substance abuse, or participation in dangerous hobbies like skydiving can lead to a denial.

Additionally, inaccuracies or omissions in the application process, such as failing to disclose relevant health information, can also result in a denial of coverage.

Common Reasons to Be Denied Life Insurance

Life insurers use a myriad of criteria to assess risk before deciding on applications.

Here are some of the primary reasons you might be denied life insurance coverage:

• Pre-existing medical conditions like cancer, diabetes, or heart disease.
• Risky behaviors such as smoking, excessive drinking, or drug use.
• Dangerous occupations including mining, logging, or commercial fishing.
• A poor driving record with multiple DUIs or reckless driving incidents.
• Advanced age, typically over 75 to 80 years.
• Family history of hereditary diseases.
• Criminal record with felonies or fraud.
• Misrepresentation of information on the application.

Improve Your Chances of Getting Insured

Understanding these common pitfalls can be the first step toward addressing potential issues before reapplying for life insurance.

It can be frustrating to receive a denial, but there are proactive measures you can take to enhance your chances of approval.

Here are ways to prepare a more complete and impressive life insurance application:

• Gather accurate and detailed medical records to provide to the insurer.
• Disclose all relevant lifestyle information honestly, including habits and job-related risks.
• Plan for a medical exam if required, ensuring any controllable health indicators are within normal ranges.
• Enhance your credit score by managing debts and avoiding bankruptcy.
• Consider lifestyle changes such as quitting smoking or losing weight to improve health-related metrics.
• Provide comprehensive documentation for any legal issues and how they've been resolved.

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Alternatives Life Insurance Options If Turned Down

If denial does occur, don't lose hope. There are multiple alternatives for those who have been turned down by traditional insurers.

Exploring these options can keep your quest for coverage on track:

• Guaranteed Issue Life Insurance: Provides coverage without medical examination and is ideal for high-risk applicants.
• Group Life Insurance: Offered by employers or associations, this option might have lenient qualification criteria.
• Riders on Your Spouse's Policy: Adds coverage without individual underwriting processes.
• Employer-Provided Life Insurance: Often recognizes employees’ coverage needs irrespective of health conditions.
• Accidental Death Insurance: Offers payout in the event of accidental death.
• Associations: Sometimes offer life insurance as part of membership benefits.

Top Guaranteed Issue Life Insurance Companies

Comparing options is a wise strategy to ensure you get the best deal.

Allstate Benefits offers a rare advantage with no waiting period, unlike Mutual of Omaha, which imposes a two-year waiting period for full benefits.

While both provide peace of mind with permanent protection, Allstate Benefits’ immediate activation makes it standout—particularly advantageous for seniors and high-risk individuals.

• Allstate Benefits Insurance Company: extends their hand to individuals aged 18 to 70, offering instant coverage up to $75,000 with no waiting period and covers spouses and children, too. This flexibility appeals to those looking for quick solutions without the conventional hurdles. Get a FREE Quote.
• Mutual of Omaha caters to a more mature audience between 45 and 85 years old, providing coverage up to $25,000. Though it adopts a two-year waiting period and a graded death benefit, the policy features a 30-day free look period. Get a FREE Quote.

Make sure to choose a policy that perfectly aligns with your financial capabilities and coverage needs. Evaluating these options can become easier by recognizing why people choose this type of insurance.

For many, it covers end-of-life expenses like funeral costs, helps pay off minor debts, or leaves a small legacy. It’s also a go-to for those denied traditional coverage or unwilling to undergo medical exams due to chronic health conditions.

Each company offers competitive rates, but factors like coverage amount, age, and specific terms like waiting periods can influence your decision.

Features of Allstate Benefits vs. Mutual of Omaha

Let's break down the features of Allstate Benefits vs. Mutual of Omaha for guaranteed acceptance coverage.

Allstate Benefits Insurance Company

• Guaranteed Acceptance: Ages 18-70
• Coverage Amount: $10,000 up $75,000
• Available in every state and DC (except NY)
• No Medical Exam Required
• No Health Questions Asked
• No Waiting Period
• No 2 Year Graded Death Benefit
• Policy builds cash value, loan available
• Lifetime protection
• Premiums never increases, coverage never decreases

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NOTE: To qualify, applicants must be working at least 20 hours per week and not collecting any form of disability income or SSDI.

The policy goes In Force on the first day of the month after it's purchased. For example, if the policy was purchased during the month of January, it would be active February 1st.

Mutual of Omaha

• Guaranteed Acceptance: Ages 45-85 (50-75 in NY)
• Coverage Amount: $2,000 up to $25,000
• Two year waiting period limited death benefit
• No physical exam
• No health questions asked
• 30 day money-back guarantee
• Policy builds cash value, loan available
• Lifetime protection
• Premiums never increase, coverage never decreases 

Start Your FREE Quote

Consult Financial Advisor

Sometimes, navigating this path alone can seem daunting. This is where a professional can make a difference.

Consulting a specialized high risk life insurance broker can enhance your application’s prospects. Brokers with experience in high-risk life insurance cases have access to specialized markets and know how to tailor applications to meet insurer expectations.

Brokers often know which companies are more lenient with certain conditions or risk profiles, offering a strategic advantage for applicants previously denied coverage.

This professional insight can be invaluable, particularly if you're addressing issues like high-risk medical conditions or lifestyle habits.

Highly Recommended – JRC Insurance Group

JRC Insurance Group helps you shop, compare and save on life insurance protection. Regardless of your age or health background, we'll shop our 63 top life insurance companies and find you affordable life insurance you need to protect your family and fit your budget. Compare the best life insurance rates for savings up to 73%. Get Your FREE Quote.

Factors That Affect Life Insurance Approval Decision

Beyond securing coverage, understanding the life insurance landscape equips you with knowledge to make informed decisions.

Recognizing the various factors that influence approval decisions can demystify the process:

• Accurate medical records and truthful health history.
• Stable financial status and good credit scores.
• Transparent lifestyle information, including occupational risks.
• Compliance with application instructions and completeness of information.
• Up-to-date legal and criminal background checks.

It’s common for applicants, especially those denied, to wonder "why life insurance is denied for specific conditions”. Many insurers assess the severity of the condition and the success of treatments undertaken before making a decision.

According to reports from the American Council of Life Insurers (ACLI), nearly 70% of life insurance applications are approved without issues, underscoring that while denials occur, they are often due to specific risk factors rather than a blanket aversion to applicants.

Options to Consider If Denied Coverage

If you find yourself stuck, explore additional steps such as:

• Researching no-exam life insurance options that don’t require medical tests.
• Seeking policies designed specifically for high-risk profiles.
• Continually updating your personal and health information to reflect any improvements like a healthier lifestyle.

Another option for denied applicants is to consider "final expense" insurance policies, which often have more lenient underwriting criteria designed specifically to cover end-of-life expenses, providing peace of mind without the rigors of standard coverage criteria.

Cost of Guaranteed Acceptance Life Insurance

Sample Premiums

Here's a comparison of monthly premiums for $10,000 coverage for non-smokers age 50:

Allstate Benefits:

• Male: Approximately $28.18/month for $10,000 coverage.
• Female: Around $28.18/month for $10,000 coverage.
• Get a FREE Quote

Mutual of Omaha:

• Male: Close to $40.20/month for $10,000 coverage.
• Female: About $30.40/month for $10,000 coverage.
• Get a FREE Quote

These rates are based on various factors including age, gender, and smoking status. It's a good idea to check for personalized quotes to get the exact figures.

Understanding costs is critical since premiums can be higher than other life insurance types.

Underestimating this aspect can lead to budgetary constraints, particularly if on a fixed income.

Average Funeral and Burial Cost in the U.S.A.

As you assess the costs, it's valuable to consider the average funeral and burial expenses in the U.S.A., which sit around $8,592.

These figures help underline the adequacy of coverage amounts typically offered by guaranteed acceptance life insurance policies.

Appeal Denial of Coverage

Occasionally taking no for an answer might not be the endpoint. It's possible to appeal a denial decision by providing additional information or clarifications that might have been overlooked.

Many find reassurance in knowing denial isn't the conclusion of their journey. Instead, it's often a stepping-stone toward finding a better-suited policy or improving one's insurability over time.

For those searching online about "why would you be denied life insurance," acknowledging that rejection can drive significant emotional distress is crucial.

Although it can feel like a personal setback, understanding the insurance process's nuanced nature helps mitigate confusion and frustration.

Summary

Finally, if you’ve been denied, explore a free quote with companies offering specialized or alternative policies. Life insurers like Allstate Benefits and Mutual of Omaha offer options with simplified underwriting processes and guaranteed approval for those with specific needs.

Remember that knowledge is power. By educating yourself on insurance processes and consulting professionals when necessary, you're better equipped to navigate rejections, reapply with improved documentation, and ultimately secure the coverage you need for your future.

Guaranteed Issue Life Insurance Quotes

Top Pick – Allstate Benefits Insurance Company

Allstate Benefit's Guaranteed Acceptance policy offers $10,000 to $75,000 of coverage to working applicants between the ages of 18 and 70. Rates start as low as $9.65 per month. There’s no medical exam and no health questions. You cannot be turned down. You can get a quote and apply today. Start Here to get a FREE Quote.

NOTE: To qualify, applicants must be working at least 20 hours per week and not collecting any form of disability income or SSDI.

Highly Recommended – Mutual of Omaha

Mutual of Omaha offers guaranteed acceptance whole life insurance for people age 45 to 85. Choose $2,000 up to $25,000 of coverage. Rates start as low as $8.84 per month. There’s no medical exam and no health questions. You cannot be turned down. You can get a quote and apply online now. START HERE to get a FREE Quote.

• Your life insurance policy comes with a 30 day Risk-Free, Money-Back Guarantee

Resources:

• The Pros and Cons of Guaranteed Issue Life Insurance
• Guaranteed Issue Life Insurance FAQs
• Tips for Buying Guaranteed Issue Life Insurance