Reasons for Life Insurance Denial

by Rod Howell
If you like to sky dive, it could make it hard to get life insurance.

Life insurance is a great way to provide financial security for your family in case you pass away prematurely. However, an insurance company may deny coverage based on several factors. Depending on the reasons for your denial, it may be hard for you to find coverage with another insurer.

Health

A common reason for being denied life insurance is poor health. Life insurance companies won’t cover you if you have a medical condition that increases your likelihood of death, such as terminal illness. Other medical conditions, including diabetes and kidney and heart diseases could be reasons for denial as well. Insurers have different ways to find out about your health. Besides the answers you provide on your application, they may request medical records or have you undergo a physical by one of their doctors.

Hobbies and Jobs

If you engage in high-risk sports and activities, you are may be denied life insurance. Dangerous hobbies such as bungee jumping, skydiving, scuba diving, hang gliding and car racing are red flags for life insurers because they increase your risk for premature death. Your job can also cause your life insurance application to be denied if it poses a risk of death.

Misrepresentations

Life insurance companies do a thorough investigation of the answers you provide on your life insurance application. If you misrepresent yourself on the application by omitting or providing false information, and an insurance company finds out, you will be denied. An example of a misrepresentation is when you put down you’re a non-smoker and you actually smoke a pack a day.

Other Insurers Know You have Been Denied

If you’ve been denied life insurance, other insurance companies can find out why you were rejected without you telling them. Life insurance application answers and medical exam information are recorded in the Medical Information Bureau’s database for all insurers to see. This prevents applicants who were denied life insurance from providing false information to gain coverage somewhere else.

Considerations

Some mistakes that cause life insurance applications to be denied can be corrected. For instance, if your denial is linked to contaminated lab work or a medical misdiagnosis, your doctor can clarify the errors with the insurance agent. If the denial was because you’re overweight or have high blood pressure, you can improve your health and apply again in several months. You can also consider applying to companies that specialize in covering high-risk individuals in exchange for higher premium payments. Another option is to ask your employer if it has a group life insurance plan you can participate in if you can’t acquire coverage on your own.

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