A Life Insurance Decline? Consider It A Good Starting Point!

It’s just a bad feeling when a life insurance company declines to offer you coverage. They don’t want to accept the mortality risk!! Do they think you’re dying? Is there something your doctor isn’t telling you? Will you ever be able to get life insurance, or are you black balled now?

I can’t tell you how many inquiries come through our website that start, “I’ve been declined by XYZ company due to whatever”. That person’s thinking is that they may never be able to get life insurance for their family’s protection. My thinking is that this is a good place to start! We know who declined the person and we know why so the mission is pretty simple. We need to find a company that doesn’t share the same underwriting philosophy, or figure out if the case was just presented poorly and needs a more complete presentation to put an underwriter at ease.

Supposedly there are about 2000 companies that write life insurance. For many it is just a product they have because they wouldn’t want to miss any chance to make money from you. You certainly don’t think life insurance when you hear State Farm, Farmers or Farm Bureau, but they are licensed to sell life insurance. The only problem is they really don’t care if they do and for that reason their underwriting is definitely anti-approval unless you’re in perfect health and even then their prices stink.

That thought aside, for a minute let’s just assume there was a way to apply with all of the companies at once, all 2000. If you had well controlled high blood pressure you might be approved by
most of the companies, but once you got past the top 100 you would find the rates rather unattractive. If you had a history of asthma I suspect you might be declined by 25% of those companies and the rates after the top 50 would be rather painful to look at.

If you had well controlled type 2 diabetes with no other risk factors I suspect you might get 50-100 approvals and the 10 best rates would be the only rates that didn’t grab your gag reflex and get it going. If you had a history of a low stage and grade prostate cancer you might get 20 approvals and 2 or 3 of those might have a price worth considering. If you have very well controlled bipolar disorder
you might get 5-10 approvals and 2 of those might be workable.

All companies have drawn a line in the sand on just about every health issue you can imagine. That is the bad news. The good news is that for almost any health issue you can imagine there are companies, albeit only a few in some cases, that understand it and as long as treatment is successful, are willing to accept it as a risk.

So why do I consider a decline as a good starting point? Consider the numbers I just presented and consider the odds that your decline came from the wrong company. Declines very often have almost nothing to do with you and almost everything to do with a particular company’s underwriting philosophy.

Bottom line. The chances of turning a decline into an approval are actually very good if you have a knowledgeable independent agent working on your behalf. Don’t take no for an answer.