With life insurance coverage denied, you still have options available to you. You may still be able to get coverage from the insurer, so don't assume that, "No means no" in this situation.
Get the Facts When Life Insurance Coverage Denied
When you have submitted a claim for coverage, the first thing you should do is find out exactly why the insurance company made that decision. You should ask for a letter outlining the reason or reasons why the insurer is not prepared to extend coverage.
Insurance Underwriter's Error
It is possible that the insurance company's underwriter made an error when processing your application. Test results may have been misinterpreted or the wrong ones may have been attached to your file. When you get the letter from the insurance company, read it carefully to see if the tests it mentions were the same ones you were asked to undergo with your application.
Ask Your Doctor for Help
In a situation where your life insurance coverage was denied, you have the option of approaching your doctor to provide the insurance company with more information about your medical history or current health.
Get a Copy of Your Medical Records
You can request a copy of your medical file from the Medical Information Bureau (MIB). MIB is owned by a number of life insurance companies in the United States and Canada. It keeps a database containing medical records on individuals who have applied for the following types of insurance from one of its members:
- Life insurance
- Disability insurance
- Health insurance
- Long-term care insurance
- Critical illness insurance
The MIB was set up to protect insurance companies from applicants who may make a mistake when answering questions on their application or who deliberately provide false information to an insurer. When you apply for an insurance policy, the company's underwriter compares the information on your application to what is in your MIB file. This information cannot be used as a reason to deny your application; discrepancies between your application and the MIB file can only serve as a warning to the underwriter.
Apply to a Different Insurer
Different insurance companies vary in their criteria used to determine who they will extend coverage to and who they deem uninsurable. Simply because your application for life insurance coverage was denied by one company, it doesn't mean you will not be covered by a different carrier.
If the reason you were turned down has something to do with your current health and there has been a change for the better, then you can reapply for coverage. The insurer may feel you are a better risk now than in the past. Six or 12 months may make a big difference in your insurability.
Get Group Life Insurance Coverage
If you work for a company that offers a group life insurance plan, apply for coverage there. You may end up paying more for your insurance, since everyone who applies is accepted and the insurer ends up charging more in premiums to account for the fact that not everyone in the group will be in good health.
In a situation where you are self-employed or you can't get life insurance coverage through your employer, you can still look at trade or professional associations you belong to for group insurance coverage. Your college or university alumni association may also offer coverage.
State High-Risk Insurance Pool
Your state may offer a high risk insurance pool to cover people who are deemed to be otherwise uninsurable. The criteria vary from state to state, but you will need to be able to prove that you have been denied coverage by an insurer to qualify.
With your application for life insurance coverage denied, you still have options available. You may still be able to get the protection you need to provide financial protection to those you care for the most.