What Should You Do When Your Life Insurance Is Rejected?
Hitting a roadblock when you are trying your best to protect your family is the worst thing possible. Like, applying for the best life insurance plan only to find out that you have been rejected.
Do not worry – there are still options out there for you to pursue. Here’s what you should do.
Ask for More Information
Your first step should be to contact the insurance company to find out the reason behind rejection.
Insurance companies look at your medical and non-medical risks as they go through your application. They can reject your application for anything related to a serious medical disorder (such as cancer or heart disease) or underperforming results from your life insurance medical examination, to non-medical reasons like bankruptcy, criminal records, or even involvement in adventure sports like paragliding, bungee jumping, etc.
Review your case
Once you know why you were rejected, you can make sure to get their facts right – because no one knows your situation better than you!
If any of the information they returned does not seem up to date or is just plain wrong, now is the time to appeal.
Check with your workplace
If it looks like your life insurance claim is truly denied, it is time to check with your employer. Your workplace may have a group insurance plan for you.
A group insurance plan should not cost you anything. But, if you want an increase in the amount of coverage, you can do so out of your own pocket. Supplementing your group plan is an option you should pursue only when you are sure that you have no other options.
Also remember, if you quit your job, you will lose your coverage.
Contact an experienced life insurance advisor
If you have not already, it’s time to call an expert! An independent life insurance advisor can be a saviour at a time like this. They can help you take the right call in how to move forward.
The great thing about experienced advisors is that they impeccable know the life insurance underwriting process (the process that determines whether your application will be approved or denied).
Plan a waiting period
Sometimes when you are denied life insurance, you are constrained to play the waiting game. Take the time to correct any health issues resulting in denial. Also, take this opportunity to lose weight or lower your blood pressure or cholesterol.
If you maintain healthy habits (like eating a healthy diet, quitting smoking, and exercising regularly), it could make all the difference the next time you apply.
And time could also help with non-medical reasons for denial, such as allowing enough time for the settlement of those multiple speeding tickets.
Apply again, but for a different policy
If your situation is serious and other solutions (like the employer-sponsored life insurance we mentioned above) are not available, there are a few life insurance plans without a medical exam that you can consider.
If you are simply uninsurable, these no-medical insurance plans offer you something, and that’s better than having no coverage at all. But you should always speak to an experienced life insurance advisor before opting for one. The consultation typically comes free of any charge.
- Simplified Issue Life Insurance
These policies do not require a medical examination, but you will need to complete a medical questionnaire with your application. The questions will ask you if you have any serious health problems. If you have any, you will unfortunately again be rejected.
The insurance premiums for this life insurance plan will cost you more. Payments are generally limited to $500,000 or less, but this type of policy might work if your medical condition is not serious.
- Guaranteed Issue Life Insurance
If you are older or have a serious health problem, a guaranteed issue plan allows you to purchase life insurance without a medical exam and without having to answer dozens of questions in a medical questionnaire. But the downside is the payout: it’s small, usually up to $50,000.
And some policies will limit your benefit payments if you die within the first two years. So you may be eligible to get your premiums paid back to you, but nothing more. If you have a serious medical condition, you will need to consider whether it’s worth paying a high premium for such a small payment (or not at all).
- Mortgage life insurance
Mortgage life insurance is only meant to cover your mortgage balance. You will not have to go for any medical test.
In case you have a mortgage, you will just have to answer some health questions after the issue of your mortgage. This can work in case your regular life insurance is denied and you do not have any serious medical condition.
Remember, no-medical life insurance policies will always cost you more than regular life insurance. The payout will also be substantially less than satisfactory. But you may opt for these ONLY IF your options are severely limited.
Let us talk about life insurance with the best life insurance advisors in Brampton, Mississauga, Toronto, and Hamilton – No fees, No Obligation
At Trust Life & Investments, we are all about providing affordable life insurance options for our customers in Canada. We have over 30 years of experience providing expert insurance and investment advice for both businesses and individuals. Get in touch with our expert life insurance advisors to know about the best and affordable life insurance plans in Mississauga, Toronto, Canada. No fees!
Let us discuss life insurance over a cup of coffee so you are aware of the best life insurance options for you depending on your budget, liabilities, health conditions, and lifestyle. Your unique needs call for a unique custom plan, and Trust Life is all about giving you the best life insurance plan in town that is just made for you, and only you!