Life Insurance: Uninsurable? Strategies For The Uninsured

Being denied life insurance can be stressful, especially if your income supports a family. However, it's important to remember that there are still options available to you. Firstly, find out why your application was denied – this could be due to medical history, exam results, driving record, criminal record, or financial distress. Once you have this information, confirm the results with your physician or relevant authority to ensure accuracy. Next, consider working with an independent life insurance agent who can search for policies that are a better fit for your circumstances. You may also want to apply for a different type of life insurance policy with a more lenient approval process, such as guaranteed issue coverage. Additionally, if your employer offers optional coverage, consider buying group life insurance, which is typically cheaper and may have a simpler approval process. While it can be disheartening to be denied life insurance, there are alternative paths to getting the coverage you need.

Ask for more information from the insurance company

If you are unable to get life insurance, it is important to ask the insurance company for more information about their decision. Here are some key points to consider:

Ask for Clarification

Firstly, ask the insurance company to clarify their reasons for denying you coverage. There could be a variety of factors at play, and getting specific details will help you understand their decision. You can also inquire about any specific guidelines or criteria they follow when evaluating applicants. This information will give you a clearer picture of why your application was not successful.

Understand Underwriting Processes

Different insurance companies have their own underwriting processes, which are used to assess an applicant's risk profile. Ask the company to explain their underwriting process in detail, including any specific health conditions they consider red flags. Understanding their evaluation criteria will help you identify areas that may have contributed to their decision.

Request Information on Alternatives

Inquire about alternative options or solutions they can offer. Some companies provide specialised coverage for specific medical conditions or situations. Ask if they have any programs or policies that could be a better fit for your circumstances. This demonstrates your willingness to work with them and find a suitable solution.

Seek Feedback on Improvements

If your application was rejected due to certain health conditions or risk factors, ask the insurance company what improvements you could make to increase your chances of acceptance in the future. For example, if your health condition improves or becomes well-managed, ask if this would change their decision. Understanding what adjustments you can make will help you take proactive steps toward obtaining coverage.

Explore Customised Plans

Ask the insurance company if they offer customised or tailored plans that can be adapted to your specific circumstances. Some companies may be willing to work with you to create a plan that addresses your unique needs. This could involve adjusting the coverage amount, terms, or conditions to find a solution that fits within their risk parameters.

Inquire About Reconsideration

Finally, ask the insurance company about the possibility of reconsideration. Some companies may be open to reviewing your application again after a certain period or if your circumstances change significantly. Understanding their policies on reconsideration will give you an idea of whether it's worth reapplying in the future.

Check with your workplace for group term life insurance plans

If you are struggling to get life insurance, one option is to check with your workplace to see if they offer group term life insurance plans. Many employers provide this type of insurance as a benefit for their employees, and it is often provided at little to no cost to the employee. Group term life insurance is a type of temporary insurance that covers multiple people under one contract, usually issued to an employer who then offers coverage to employees.

• Eligibility: To be eligible for group term life insurance, you typically need to meet certain requirements, such as working a specific number of hours per week or being employed by the company for a certain period.
• Cost: Group term life insurance is relatively inexpensive compared to individual life insurance, and participation rates tend to be high. Basic coverage is often provided at no cost to employees, while additional coverage for yourself or your family members may be available for purchase.
• Coverage: The standard amount of coverage is usually tied to the employee's annual salary, with premiums based primarily on the insured's age. Employers typically pay most or all of the premiums for basic coverage. Additional coverage may be available for an extra premium paid by the employee, often in multiples of the employee's annual salary.
• Portability: Group term life insurance is often not portable, meaning that if you leave your job, you may not be able to take the policy with you. However, some employers may allow you to convert your group policy to an individual policy, but the cost could increase.
• Acceptance: Group term life insurance is usually guaranteed issue, meaning you don't need to take a medical exam or answer health questions to qualify. This can be beneficial for those with pre-existing health conditions.
• Supplemental coverage: You may have the option to purchase supplemental coverage for yourself or your family members. Supplemental coverage may require underwriting, which typically involves answering health-related questions to determine eligibility and rates.
• Tax implications: The first $50,000 of group term life insurance coverage is tax-free for the employee. Any amount above this that is paid for by the employer is considered a taxable benefit and must be included on the employee's W-2 form.

While group term life insurance can be a convenient and affordable option, it's important to consider its limitations. The coverage may not be sufficient for your needs, especially if you have dependents or significant financial obligations. Additionally, the coverage is usually tied to your employment, and the premiums tend to increase over time. Therefore, it's essential to review the details of the group plan offered by your workplace and consider combining it with an individual life insurance policy to ensure adequate coverage.

Reach out to a life insurance agent

If you've been denied life insurance, it's time to call in an expert. An independent life insurance agent can be a lifeline when you're struggling to get insured. They know the ins and outs of the underwriting process and can pick up on any red flags in your application that might have led to your initial rejection.

Just because one company has denied your application, that doesn't mean all insurance companies will. Agents can search across a much wider market for a policy that works for you. They can advise you on the next steps to take, which could include applying to a more suitable company or waiting a few months before applying at a later date.

An agent should be able to work around any red flags in your application. For example, if you have a pre-existing condition such as cancer, unmanaged diabetes, or heart disease, they may be able to find an insurer that covers people with these conditions. If you have a poor driving record, they may know of insurers that are more lenient in this area. If you have a criminal record, they can find a company that is more flexible when it comes to this.

If you have a pre-existing condition, it's important to find an independent life insurance agent who works with an impaired risk specialist. This is a broker who will know which insurance companies are more likely to provide a good rate for your particular condition. Make sure your agent is submitting informal inquiries rather than formal applications, which will be recorded by the MIB Group. This could save you a lot of denied applications.

Allow for a waiting period and improve your health

If you've been denied life insurance, it's important to remember that you still have options. While it can be frustrating to receive a rejection, there are steps you can take to improve your chances of getting approved in the future. Here are some suggestions to help you navigate this situation:

Understand the reasons for denial: Request detailed information from the insurance company about why your application was denied. This could be due to medical history, exam results, driving record, or other factors. Knowing the specific reasons will help you address those issues effectively.

Improve your health: If your denial was due to health-related reasons, focus on building healthy habits during the waiting period. For example, work on managing chronic conditions with consistent treatment, improving your diet, quitting smoking, or increasing physical activity. These changes may take time, but they will not only enhance your overall well-being but also increase your chances of approval in the future.

Address non-medical reasons: Non-medical reasons for denial, such as a poor driving record or financial issues, can also be addressed during the waiting period. Consider taking a break from applying and work on improving these areas. For example, you could take a defensive driving course to improve your driving record or focus on improving your financial situation by saving more and reducing debt.

Work with a life insurance agent: Consider consulting an independent life insurance agent who can guide you through the process. They can help you navigate the complex world of insurance underwriting and find a policy that suits your specific needs. Agents have a broader market reach and can identify insurers that are more lenient regarding specific health conditions or habits.

Explore alternative policies: During the waiting period, research alternative life insurance products such as guaranteed issue life insurance, final expense life insurance, or accidental death and dismemberment insurance. These options may provide coverage, especially if your health condition or risk profile is a concern. Remember that these policies might come with higher premiums or lower death benefits, but they can be a temporary solution until your circumstances improve.

Remember, each life insurance company has its own underwriting guidelines, and identical applications to different carriers can yield varying results. Don't give up; instead, use this waiting period to make positive changes and improve your chances of getting approved for life insurance in the future.

Apply again, but for a different policy

If you've been denied life insurance, don't panic. There are alternative options to explore, such as applying for a different policy. Here are some tips to help you navigate this process:

Understand the reasons for denial

Before reapplying, it's important to understand why your previous application was denied. Review the insurer's reasons and see if there are any specific issues that need to be addressed. For example, was it due to a pre-existing medical condition, your age, or some other factor? Understanding the reason for the denial will help you choose a more suitable policy and increase your chances of success.

Shop around for different policies

Not all insurance companies have the same underwriting criteria. By shopping around and comparing policies, you may find insurers that are more flexible about certain health conditions or have different age requirements. It's worth contacting various companies and discussing your situation with their representatives to see if they can offer a policy that suits your needs.

Consider a guaranteed issue life insurance policy

If you have a pre-existing condition that is making it difficult to obtain traditional life insurance, you might want to look into guaranteed issue life insurance. These policies typically have a lower coverage amount and higher premiums, but they don't require a medical exam or health questions. This can be a good option if you're unable to qualify for other types of policies.

Work with an independent insurance agent

Consider working with an independent insurance agent who has experience in impaired risk cases. They will have knowledge about which insurance companies are more likely to offer favourable rates for your specific condition. Make sure your agent submits informal inquiries rather than formal applications, as multiple denied applications can hurt your chances with other insurers.

Be mindful of the timing

If you've recently experienced a significant health event, such as a cancer diagnosis or a heart attack, it might be advisable to wait before reapplying. Insurance companies may have specific timelines for when you can apply, such as a certain number of years after completing treatment. Check with the insurer about any waiting periods or requirements they may have.

Improve your health and reapply

If your health improves or your condition is well-managed, you can consider reapplying for life insurance. For example, if you've made positive changes to your lifestyle, managed your condition effectively, or received a positive long-term prognosis, insurers may view your application more favourably. Remember that the younger and healthier you are, the more affordable life insurance tends to be.

Frequently asked questions