I wrote this post 4 years ago today and it could use updating and clarification. So, here I go, on task and laser focused, sort of…All the best.

What Does Being Declined Mean?

For those applying for life insurance there is nothing more disconcerting and worrisome than a company declining your application and refusing to offer the coverage you want and need. No one applies for life insurance expecting a decline so to run into that dead end leaves you wondering if you’re dying or what risk you present that is so borderline that a company refuses to accept it. Being declined means that the life insurance company you applied through isn’t willing to accept you in their risk pool of clients. It’s critical to understand that what is acceptable varies wildly from one life insurance company to another.life insurance no medical exam quotes

So, let’s discuss several reasons that life insurance is declined and why you didn’t see it coming. It isn’t as rare an occurrence as you might think so better to know how it happens in order to avoid it.

Five Things You Need To Know

  1. The life insurance industry has always been lacking in proper education of agents. Consequently the average life insurance agent honestly doesn’t know what will cause a declined. If they don’t know, there is no chance that you, the consumer or client, will know. I put the blame for a large number of declines directly on the agents who don’t do their homework, don’t ask all the health questions, don’t know the importance of the answers to those questions, and because of their own ignorance use the wrong company.
  2. Equally guilty in creating declines are the large on line agencies like PolicyGenius, Quotacy, Selectquote and plenty of others. Their whole business model is based on volume. They use the law of large numbers, knowing that there will be plenty of customers who don’t get the end result they want and need. But for these agencies those unhappy customers are just a aminor inconvenience to get to the pile of easy business.
  3. Almost all companies require an exam and labs (blood and urine). If you are someone who doesn’t get annual physicals that include lab results you may get caught wishing you had. Iif your A1c (diabetes), SGOT or SGPT (liver functions) or PSA (prostate issues) are out of normal, it could lead to a decline or at least a much higher rate than you were expecting. Life insurance companies will decline you if they know that these are issues that need to be checked out by a doctor. Again, the agent can make difference. An inexperienced agent or (#2) large online agency, will just let let that decision stand and leave you wondering what happended. An experienced life insurance agent might know another company that will approve you  or will guide you in the steps that need to taken and stay with you until you are medically ready to renew the effort.
  4. Life insurance is often declined or at least postponed because somewhere in your medical records it was suggested, recommended or ordered for you to have testing done for something, and you didn’t follow through with it. There are two ways to address this and get things back on track. The first is to get the testing done and the second, if you truly believe the tests weren’t necessary, get a second opinion. It also isn’t uncommon that the doctor that ordered the tests will write a letter noting that there doesn’t appear to be any current need for the testing.
  5. OK. I’ve called out agents, big agencies, labs, and doctors. Now it’s your turn. My quotes to you and my ability to get you approved are only as good as the information you provide. All of us can can innocently forget some tidbit of medical history, but not admitting something you know is shooting yourself in the foot. Keep in mind that answering my questions just begins the process. It ends with a review of your medical records and if those don’t match with what you provide, well, we’ll try to get things back on track but it makes it much harder.

Bottom Line

Bottom line. Honestly most life insurance declines are due to agent inefficiency. A good agent is going to find a way to avoid that decline up front or fix it when it breaks. If you have questions or have been declined and don’t believe you should have been, call or email me directly. My name is Ed Hinerman. Let’s talk.