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.
So, let’s discuss three reasons that life insurance is declined and 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.
- Let’s face it, if the average life insurance agent honestly doesn’t know what will cause a decline, there is no chance that the consumer, or client, will know. So 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. All life insurance companies, like agents, are not created equal and don’t underwrite equally. One companies decline can very easily be another companies approval at their best rate class. So, wrong life insurance agent using the wrong company (inexperience) leads to a decline while using the right agent who uses the right company (experience and independence) can lead to the approval you need.
- Lab results can often throw a life insurance application into a decline tailspin. If you are someone who doesn’t get annual physicals that include lab results you may get caught wishing you had if your A1c (diabetes), SGOT or SGPT (liver functions) or PSA (prostate issues) are out of normal. Life insurance companies will decline you if they know that these are news to you and are issues that need to be checked out by a doctor. Again, the agent can make difference. A lame agent will just let the decline fade into history while a good life insurance agent will guide you in the steps that need to taken and stay with you until you are medically ready to renew the effort.
- 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, is to get a second opinion.
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.