Declined for Life Insurance? – You Have Options
Posted in Life Insurance FAQs last updated on January 26, 2022Have you been declined for life insurance before? Do you worry that a company might deny you coverage in the future for a pre-existing condition?
Table of contents
Many Americans have a serious medical condition, a severe mental disorder, or are permanently disabled. Others have a family history of illness or work in dangerous occupations. Underwriters often decline people in these situations when they to apply for a standard life insurance policy.
You don’t have to worry because there is a life insurance policy that is perfect for these situations.
“Guaranteed Issue” or “GI” life insurance covers people in the above situations.
Many companies offer these policies under different names such as “Simplified Life Insurance” or “Funeral and Burial Life Insurance.” Regardless of that they’re called, they all serve the same function.
Insurance companies created this type of policy for people who have been declined for life insurance coverage. These folks need life insurance to provide for their final expenses, debts, uninsured medical expenses, or provide a small financial safety net for their surviving family members.
Almost all Guaranteed Issue policies forego a medical exam. Some (but not all) of these policies only require that you answer a few medical questions.
One of the main benefits of these GI policies is that you can get approval for the policy quickly. Many companies can approve these policies within as little as 48 hours.
Things You Should Know About GI Policies
There are really only a handful of companies which offer Guaranteed Issue life insurance coverage. The amount of coverage is generally fairly low compared to what you can buy for a standard life insurance policy.
Because there is no medical exam involved, the premiums are often more expensive. (But not always.) This is because the life insurance company is taking a risk with little or no medical information about you.
Most of these Guaranteed Issue policies are sold as whole life or permanent life policies. This means that your coverage will be in-force all the way to age 100.
There is an option mentioned below that is a 5 year term policy. This means you have to renew your policy every 5 years and can do so without a medical exam. Most policies like this will only provide coverage to age 80.
Almost all GI policies come with a “2-year graded death benefit”. This means that the full death benefit is paid out from day 1 if your death is accidental. If your death occurs within the first 2 years from a non-accident, such as a health issue, the full death benefit is not paid out. Your heirs may get something like a return of premium + 10% or 20%. After year 2, the full death benefit is paid out regardless of cause. This keeps the insurance companies from losing too much money from people who know they’ll die soon taking out large policies.
Some companies offer face value amounts as low as $1,000. Most companies do not offer coverage higher than $10,000 while some might go as high as $25,000. GI policies are typically used to cover burial expenses and pay off small medical debts because the face amount is relatively low.
GI policies vary considerably in the amounts of coverage, age restrictions, and premium costs.
Highest Guaranteed Issue Face Amount
For these reasons, you should always talk with an independent life insurance agent before buying a Guaranteed Issue policy. Independent life insurance agents work for you and not the life insurers. They have access to dozens of life insurance companies. All those options will give them the experience to know who has the most reasonable rates for your situation. For example some companies might care less about family history while others are a less concerned with hazardous occupations.
There is one company who offers a GI policy where you can find coverage as high as $50,000. This is a unique product with a relatively high death benefit that younger people can use for life insurance. The minimum age to be eligible for this unique GI product is age 18.
Featured “Guaranteed Issue” Life Insurance Product
This Guaranteed Issue product is through a Group Insurance plan which simply requires a 1-time $25.00 payment to activate the product membership.
Anyone can apply for this Guaranteed Issue Term life insurance product (Protection PLUS), and it is the only one that we know of offering coverage as high as $50,000. Most other Guaranteed Issue products available in the market offer much lower face amounts.
You have a choice of 5 products which are sold as a 5 Year Renewable and Convertible Modified Term life insurance package. They don’t ask medical questions and don’t perform an underwriting review.
Other benefits of this unique Guaranteed Issue Life Insurance Product include:
- No Deductibles
- No Pre Existing Medical Condition Limitations
- No Medical Exam Required
- No Claim Forms
- No Limitations on Usage
- No Age Restrictions
You must 18 years or older to apply for this policy. You can keep renewing until you are 80 years old.
The 5 products which you can select include provide face amounts in $10k increments:
- ProtectionPLUS10 – $10,000 in coverage
- ProtectionPLUS20 – $20,000 in coverage
- ProtectionPLUS30 – $30,000 in coverage
- ProtectionPLUS40 – $40,000 in coverage
- ProtectionPLUS50 – $50,000 in coverage
As with most Guaranteed Issue products, this one comes with a 2 year graded death benefit. This means that a smaller death benefit is paid out if death does not occur from an accident. The full death benefit is paid out from day 1 if death is accidental.
What if I die before the 2-year graded death benefit period ends?
Should you pass on within the first 2 years and death is not an accident, your beneficiaries would receive the following:
- Year 1 – 120% of All Premiums Paid Up To The Time of Death
- Year 2 – 20% of The Ultimate Face Value
After the first 2 year period has elapsed from the date of issue, your beneficiary will receive 100% of the face value of the policy, regardless of cause.
How much does the plan cost?
This guaranteed term life insurance product is much more affordable than you think. At the time of writing the cost for this product are as follows:
If you are age 50 or older, there are many other guaranteed issue options available. Give us a call with the specifics and we will shop them all to find you the best deal on your life insurance. This policy gets expensive if you are 65 or older and there are better options available.
Accidental Death Coverage with Protect Plus
What happens if the policy holder dies in an accident? The beneficiaries will receive the full amount of death benefits. Accidental death must result from an injury and be independent of all other causes. Death must also occur within 90 days from when the injury occurred. The insurer reserves the right to examine the body and perform an autopsy on the deceased.
Exclusions for accidental death cover the following:
- Bodily or mental infirmity or bacterial infection (other than that caused by the wound or cut caused by the accident), or any kind of disease even though the proximate cause of death was accidental bodily injury
- The voluntary taking of poison, drugs or inhalation of gas
- Medical or surgical treatment
- Intentional self-destruction whether the person was sane or insane
- Injury occurs while committing a felony or through participation in a riot
- Operating or riding in any form of aircraft as a pilot, officer or crew of the aircraft: giving or receiving any form of instruction or training; or had any duties with respect to the flight
- Service in the armed forces of any country at war (declared or undeclared) or war or insurrection or any act attributable to an act of war.
You can apply online for this Guaranteed Issue Product right now! Or, please free to contact Abrams Insurance Solutions at 858-703-6178 to learn more or if you have any questions.
This product is available in the following states:
AL, AR, AZ, CA, CO, DC, DE, FL, GA, IA, ID, IL, IN, KS, KY, MI, MO, MS, NC, ND, NE, NJ, NM, NV, OH, OK, PA, SC, SD, TN, TX, VA, WV, WY
Accidental Death Insurance Policies
There are other standalone accidental death policies. They’re not as comprehensive as traditional life insurance. Like, Protect Plus, the insured person’s passing must result from an accident to qualify for benefits.
However, it’s an option for people who have been previously declined or might otherwise struggle to get more traditional life insurance.
The good news on accidental death policies is that they’re almost always cheaper than traditional life insurance.
We are reviewing some of our favorite accidental death policies. You might start with Assurity’s Acci-Flex accidental death policy.
Reasons People Get Declined for Life Insurance
It’s important you understand how the life insurance application process works. Past declines don’t mean you are uninsurable. A controlled condition gives you a much better shot at a standard policy.
The first thing you should know is the underwriting guidelines vary significantly from company to company. Although a number of life insurers may decline you for a particular medical condition, other companies might be more liberal and could approve your application.
Please be aware that all life insurance companies will decline you for some recently diagnosed medical conditions. Many serious medical conditions can now respond well to treatment.
If that applies to your particular case, you may have to wait for a period of time (anywhere from 1 – 5+ years) before they will underwrite you for a policy.
Many insurance companies will consider adverse medical history where the condition is under control, is in remission, or there is no re-occurrence.
If you can’t wait for coverage in the meantime, a 5 year renewable Guaranteed Issue policy could be the perfect solution to provide coverage in the interim.
However, there are a variety of medical conditions and life situations where practically every life insurance carrier may decline you initially or permanently for standard life insurance coverage.
Top 25 Reasons Why People Get Denied Life Insurance
Life Insurance Tip – The following list is a guideline only. If anything on the list below is related to your circumstances, we urge you to call us here at Abrams Insurance Solutions at 858-703-6178 to discuss your situation. We can evaluate your situation and provide you with life insurance options. You might still qualify for traditional life insurance.
The following are some of the most common reasons insurance companies decline applications:
- History of Cancer – If your cancer is in remission or is more manageable such as Basel skin cancer, you may be considered for coverage
- Family History – If your parents and/or a sibling died at a fairly young age from the same medical condition such as cancer or other disease, your application might be denied
- Extreme Obesity – Most insurers will approve coverage for moderate obesity, but extreme obesity will like be declined
- High Blood Pressure – Many Americans are not aware they have high blood pressure which can trigger a decline if uncontrolled. If you are taking steps to keep your blood pressure under control, the underwriter will probably approve your application
- Recent Hospitalization – Underwriting goes better when doctors know the nature, method of treatment, and the stabilization of the condition. Undiagnosed problems present major concerns for insurance companies.
- Drug Use – Insurance companies don’t like illegal or unexplained drugs showing up in the urinalysis. The exception is marijuana users, but most marijuana friendly life insurers may decline heavy or chronic use.
- Heart Disease – If the diagnoses is minor or is well under control, you should be able to find coverage
- Alcoholism – If your test reveals elevated liver function or you consume excessive amounts of alcohol on a regular basis, insurance companies will likely decline your application
- ALS (Amyotrophic Lateral Sclerosis) – Also known as Lou Gehrig’s Diseases, this disease is generally fatal and will be declined
- Emphysema or COPD – Underwriters decline this conditions if you require continuous oxygen supply
- Dementia or Alzheimer Disease – Progressive conditions often result in underwriters declining the application
- Severe Mental Disorder – Various mental conditions of a severe nature such as untreated or unmanageable schizophrenia and other disorders
- AIDS – Most companies will decline this condition even though treatment is more successful these days
- Cystic Fibrosis – This condition is progressive as well as life threatening
- Cerebral Palsy – Underwriters tend to decline this due to the progressive nature and decreased life expectancy
- Liver Cirrhosis – Gradual scarring of the liver will progress over time which can impact liver function
- Huntingdon’s Disease – Another disease which is progressive and reduces life expectancy
- Kidney Failure – Most insurance companies will decline anything involving dialysis
- Uncontrolled Type 1 Diabetes – Type 1 Diabetes needs to be under control before you apply for life insurance
- Severe MS (Multiple Sclerosis) – MS is also a progressive disease and the severe forms are often uninsurable
- Awaiting Organ Transplant – If you are awaiting an organ transplant, most insurance companies will decline your application or postpone until you’ve recovered
- Poor Driving Record – If you possess multiple traffic violations and/or show multiple accidents on your record, you present a hazard to the insurance company
- Dangerous Occupations – Insurance companies have whole lists of hazardous occupations. This could include underwater salvage diving, underground mining, bush and some other commercial pilots, forestry workers, and others
- Dangerous Travel – If you travel to restricted countries or one which is in a state of war, an underwriter may decline your application
- Dangerous Hobbies – Some life insurance companies exclude or decline dangerous such as scuba diving, spelunking, parachuting
This list is by no means all inclusive. Each company has their own set of underwriting standards. What might merit a decline from one company could be just fine with another.
Solutions for a life insurance decline.
If you worry the life insurance company will decline you application, stop. Call us first at Abrams Insurance Solutions. The independent life insurance agents at Abrams Insurance Solutions can properly evaluate your situation and provide the advice you need because there is a life insurance solution that is right for you.
We can save you both time and money when it comes to finding low cost life insurance solutions that will suit your budget and an insurer which will provide you with coverage. You can apply right now for the Guaranteed Issue policy we mention above.
Our agents have access to over 70 of the most liberal life insurers in the industry. We will not settle until we find the right company. The one with the best rates for your medical issue or life situation.
You can find more information about life insurance with pre-existing conditions. Or, if you are looking for quotes, use the Instant Quotes tool on the left. There is no obligation to buy.
Have any questions about being declined for life insurance that we didn’t answer? Give us a call at 858-703-6178 because we have a solution.
