Why Might Life Insurance Be Denied?

When you apply for life insurance, there are several factors that insurance companies consider to determine your insurability. Age, mortality rate, and health status are some of the critical factors. Here are some of the reasons why your life insurance application may be denied:

Reason Description
Chronic illness If you suffer from a chronic illness, there is a high probability of your application being denied. Some companies may consider insuring you if you can provide a statement or medical records from your doctor attesting to the treatment and stability of your illness.
Age Older adults may find it difficult to find life insurance products they want at affordable premiums. As you age, the likelihood of developing health problems increases, making you a higher risk for the insurance company.
Urinalysis A medical exam, including providing a urine sample, is usually required when applying for life insurance coverage. If the lab finds blood or protein in your urine, this can pose a major problem for you. It can be caused by either extreme physical activity or kidney disease. If you’re denied because of this, have your doctor get another sample from you and have it analyzed. If it comes back normal, submit that information to the insurance company for re-consideration.
Alcohol consumption From your blood sample, insurers can determine if your alcohol consumption level is much higher than “normal” levels. If they are, the likelihood of being denied coverage is much greater.
Hazardous occupation Some occupations are considered riskier than others, posing a more considerable risk for the insurer. Life insurance is often available for members of an industry association for your profession.
Income and net worth Your income and net worth will determine how much coverage you can apply for. If the risk to the insurer is too great that there would be an enormous financial benefit for someone from your death, you may be denied coverage.
Medical Information Bureau report Life insurance companies provide information to a repository called the Medical Information Bureau (MIB). If your report shows that you have recently applied at numerous other life insurance companies and were denied coverage, this can be a strike against you.

It can be beneficial to work with an independent life insurance agent who represents multiple life insurers. They can often match your situation with insurers that are known to issue policies to people with similar circumstances as yours. Reputable insurance companies will not go out of their way to avoid paying a valid claim, but they make it clear upfront what could cause them not to pay a death claim. Having a good life insurance agent will ensure that accurate and complete information is submitted to the insurer and that you understand any conditions that could void payment of a claim.

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