I suppose there are a few people who apply and know for a fact that they will be declined life insurance coverage. I’ve actually had calls from people who were in the hospital having just undergone heart bypass surgery. They asked about getting life insurance, and while we could certainly get there with time and good healing, for a while declined would be appropriate.
Most of the reasons that applicants are declined for life insurance have to do with things they aren’t even aware of. The rest fall into the category of being in denial about some past, or even current health issue.
One other thing to keep in mind is the difference between a decline and a postponed application. A decline means that the company has decided that your mortality risk is too high for them and they will not consider insurance at all. A postpone means that you are currently declined, but with some change or further information they would be willing the put your application back on the table for reconsideration. So I will indicate with each reason whether they are a likely decline or postpone. Remember, either way you aren’t getting insurance from that com;any right now.
1. Your lipids, cholesterol and triglycerides, are off the charts. Most companies will approve even substantially elevated cholesterol, but when normal is 200 and your cholesterol is at 380, or your triglycerides are 5 times normal, your application will be declined, or postponed until you have see a doctor and the situation is under control.
2. Your glucose and/or your HbA1c are elevated. If these readings are high enough and you truly did fast before the exam, you have diabetes and didn’t know about it. It could be with lower readings that you are “pre-diabetic”. Either way it will be at least a postponement. If the readings are too high then a company will decline the application assuming it will take an extended period to get the situation under control. I had a client with an A1c of 11.8 (under 6 is normal) who was declined for life insurance. We were able to get him approved a year later when his treatment had brought the A1c down to 8.
3. Elevated liver functions will often lead to a decline, if high enough, or a postpone if they are elevated and it is just obvious that you need to see a doctor and determine why. One exception is Prudential in this area. They will allow liver functions as high as four times normal in the absence of a positive for hepatitis or a positive alcohol marker.
4. Hepatitis that is discovered on the life insurance exam is a decline. From the time of diagnosis of hepatitis until treatment has brought you to the level of insurability is generally too long to postpone.
5. A positive alcohol marker is absolutely a decline and never a postpone. An alcohol marker is run when liver functions are elevated and the test is very accurate in determining if you have taken drinking to, well, an abnormal level. A few drinks here and there, or even a few drinks a day won’t give a positive alcohol marker. Downing a six pack a day will. And before you get offended over the amount of alcohol, remember that the way they found it is because your liver is having a tough time.
6. Blood or protein in the urine is usually a decline or postpone depending on the level found. This issue can be caused by extreme physical exercise (training for a marathon) or kidney disease. There are also things like bladder cancer that can initially show as proteinuria.
7. Your motor vehicle report can lead to declined life insurance if you didn’t quite come clean on the moving violations or DUI questions on the application. If you come clean up front an agent can generally find a company that will work with you unless the MVR history is truly egregious.
8. Applying for life insurance that is not financially justifiable will lead to a decline in many cases. Life insurance is meant to replace a loss, not create wealth where it didn’t exist. This doesn’t mean that a person can’t take out $100,000 for the purpose of leaving to their children, but it does mean that someone with low income, say someone on social security, can’t take out $1,000,000 in order to create wealth where there was none.
9. Obesity is a challenge. While we can get approvals on people that are very, very overweight, there are limits. The problem arises when someone truly doesn’t know what they weigh. If someone is 6′ tall and they say, but don’t really know, that they weigh 390 pounds and when they are examined and their weight is actually 415 pounds, it’s a decline. If obesity is the issue it is better to weigh yourself or get weighed and know exactly what you’re asking your agent to do.
10. Not telling your agent about the last decline and the reason for it is a sure way to get declined again. If you don’t tell, the adverse medical information will come up in a Medical Information Bureau report anyway. The MIB doesn’t indicate if you were declined or not, but it does flag the medical issue for the very reason of preventing people from lying. If you me up front about the decline and the reason there is a good chance we can successfully shop it and get an approval. Never, ever lie.
Bottom line. There are plenty of ways to get declined for life insurance. Most of them can be overcome by knowing about your health ahead of time and telling your agent all of the story from the beginning.