If you’ve ever been declined life insurance, you know what a worrisome experience it can be. First comes the shock. Then come the questions. What do you do next? How can you ensure your family’s well being? How do you tell them that you’ve been denied?
But being denied coverage, even a number times by no means permanently relegates you to the ranks of the uninsured. In this blog post we’ll walk you through some easy next steps if you’ve been denied coverage and a next to sure fire way of ensuring your next answer is a “yes”.
If You’ve Ever Been Declined Life Insurance
Before panicking or calling together a big, serious family meeting, take a close look at the rejection document from the provider to find out on what basis declined you coverage. As we said in the intro, just because one or more insurers have declined you, this may have more to do with their own business practices than your insurability. Remember, some insurance providers like State Farm and Allstate have very strict underwriting guidelines, and so a decline from these and other insurers in the “Strict” category would tend to go the same way on applicants they might consider “High Risk”.
If you’ve been identified as “High Risk“, or know that you are entering the hunt for life insurance with a pre-existing condition, it’s a good idea to start your search with companies with less strict policies, or better yet, an independent broker who can cut through the application hassles and get you as many competing quotes as possible.
And even in the area of brokers, they are not all created equal. As we happen to specialize in helping people in “high Risk” brackets, whether you are a smoker or ex-smoker, suffering diabetes or another chronic disease, we can help cut through the red tape and get you the coverage to meet your needs and budget.
High risk cases don’t necessarily relate to your health, but perhaps the dangers associated with your chosen profession. During a the past decade’s protracted wars in the middle east a great number of American Armed Services men and women positions left for combat in Iraq and Afganistan without life insurance. Why? Because very few insurers are willing to take on the risk. You can read more about this specific area of life insurance for military personnel in a separate blog, but it underscores the importance of knowing the industry, particularly if you happen to be in a high risk category.
If there was ever a time to look to an independent broker, this would be it. We know of several insurers, including Prudential that provide coverage for military personnel in active service.
What If You Can’t Get Approved With Another Life Insurance Company?
Even if you’ve taken a few good kicks at the can and still can’t find a willing insurance carrier, there are still plenty of options for you to consider. To begin, two categories of life insurance that many people don’t know about, and provide more flexible underwriting guidelines are so-called Guaranteed Issue and Simplified Issue Graded Life Insurance policies.
New Options to Consider if You’ve Been Denied Life Insurance – Guaranteed Issue and Simplified Issue, Graded Policies
So-called Guaranteed Issue, Simplified Issue and Graded policies open up doors for anyone who hasn’t been able to get approved for a regular insurance policy.
Let’s start with Guaranteed Life Insurance. As the name suggests this type of policy can be granted to anyone regardless of their, health condition or risk. Applicants are generally asked not more than four questions, if to all of which they answer “no” they are green lit for a Guaranteed policy.
The thing to remember about this category of life insurance is that it is generally more expensive than standard life insurance policies due to the perceived high risk of the applicants. In the case of simplified issue life insurance, the next step up from Guaranteed, the applicant must answer a series of questions, but still gets to avoid the physical exam. Again, as a result of the insurer being blind to the actual risk of the applicant the costs associated with these policies is generally much higher. In addition, the amount of money paid out by the provider will generally be much less. If you are looking for a $2 million payout in the event of death, these categories of insurance policies are not for you, as they generally tend to provide payouts in the five digits.
The other important factor in these plans is the aspect of being so-called “Graded”. As you can imagine, in high risk cases no life insurance company in the world would provide a full policy payout were the holder to die the day, week or month after the policy went into effect. Thus all firms that provide these policies will put into a effect some kind of grading scheme whereby the payout combines the total number of monthly premiums paid plus interest.
Besides the build up period intrinsic to Graded policies, they also typically feature a rather conservative upward limit on how much insurance you will get. As mentioned, most these policies will be in the 5 figures They may start at $25,000, but rarely go above $100,000. The only way to go above that amount would be by enrolling in multiple policies.
Accidental Death Benefit Policies
Accidental death policies are life insurance where the death benefit is only paid out when the person’s death is the result of an accident or injuries sustained from an accident.The policies are not nearly as large as traditional life insurance or a graded benefit policy. However, if your main concern is to have coverage in the event of death that is not of natural causes or disease, the accidental death policy could be a good alternative to meet your short term needs.
We can help walk you through the process and ensure that you’re getting a plan that will provide for your family. We know that getting quality and affordable life insurance can be difficult, but we are here to assist you in making the best life insurance decision for your needs.
If you would like to review options for life insurance coverage with us, feel free to fill out the form at right or call us toll free at 1-888-552-6159.