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I have been working with a physician who has bipolar disorder and we were declined on our first life insurance application through Transamerica. Trans has pretended to be more aggressive or creative or whatever, on their trials than they actually are on formal applications, but at least for a few paragraphs that isn’t the point of this post.

I’m often asked what impact a decline has on the next attempt to apply for life insurance. People are naturally concerned that if one company doesn’t like them the word will spread and they might be completely out of the game. Actually, nothing could be further from the truth.

A decline, while frustrating and a bit humbling, gives a good agent and you the ammunition you need in order to succeed the second time around. When a company declines an application, while they are hardly ever specific about the reason, they will generally give you a good idea what they didn’t like. For instance, “confidential information contained in Dr Smith’s records 2008”. The next step is to go through Dr Smith’s 2008 records line by line and see what jumps out as being potentially annoying from a mortality risk point of view.

Assuming it wasn’t a mention of homicide or suicide or some other egregious act of uncivility that would lead to an across the board decline, the next step is clear. Shop the case using the exact language from the records and admit in the request for offers that Trans declined the case. A knowledgeable agent will have enough background with the companies he or she represents to know if an offer is likely.

The good news using this approach is that any offers that do come through are pretty unflappable. They already know the bad news. In my experience about half of the time the approval comes back better than the trial because you gave them all the bad news in the trial and when they get the complete records they get to see the good news that comes with the package.

As to Transamerica, it seems that they are trying to wiggle back into impaired risk competition by giving aggressive trial offers. Based on the experience of my first two cases of bipolar that we ran Trans applications on I would say that they are more conservative than they are letting on. Not sure what is gained by that, but it is what it is. Both cases were placed with other companies. This most recent case was approved by Banner Life.

Remember, the criteria that needs to be there in order to get a reasonable approval with bipolar disorder:

1. Someone who has not been hospitalized for bipolar disorder other than for diagnosis?
2. Someone who has not attempted suicide or had bouts with suicidal ideations?
3. Someone who is compliant with their treatment, both medications and regular followups?
4. Someone who is leading a stable family life or social life?
5. Someone who is exhibiting a stable work life?
6. Someone who is not on disability for bipolar and does not have issues with drinking or drugs? If there’s a problem here, then the answers to 3, 4 and 5 are no.
7. Best case would not include treatment with anti psychotic drugs.

Bottom line. One company’s decline is another company’s next approval. If your agent gives up in the face of a decline, get another independent agent.