Declinable Conditions For Any Type Of Non-Guaranteed Issue Life Insurance
If you have any of the following health conditions, you will be declined for all types of life insurance except for guaranteed acceptance policiesGuaranteed Acceptance
There are no health questions or a medical exam. The insurer literally knows nothing about your health, and therefore, you cannot be denied for any prior medical issues..
- Terminal illness.
- Hospice care.
- Incarcerated in jail or prison.
- Hospitalized.
- In a long-term care facility.
- In a nursing home.
- There is a pending diagnostic test or pending test results that have not yet been received.
- There is a pending surgery not yet complete.
- Bedridden.
- Wheelchair bound.
- Alzheimer’s or dementia.
- Currently being treated for active cancer that is stage 2 or higher.
Medical Conditions That Will Likely Disqualify You For Traditional Life Insurance Policies
If you have any of the following health issues, it’s very probable that you’ll be declined for traditional term life, universal life, and whole life policies.
- Cancer within the last five years (except basal or squamous cell).
- Heart attack within the last five years.
- Heart or circulatory surgery within the last five years.
- Stroke within the last five years.
- Uncontrolled diabetes.
- Diabetes with complications.
- Kidney disease.
- Congestive heart failure.
- Lung disease such as COPD (asthma is not included).
- Oxygen equipment has been prescribed (even if you’re not using it).
- Alcohol or drug abuse within the last five years.
- Psychotic mental illnesses such as bipolar disorder or schizophrenia.
- Liver diseases such as hepatitis or cirrhosis.
- Neurological disorders such as parkinsons, multiple sclerosis, Huntington’s disease, or ALS.
- Unexplained weight loss greater than 10 pounds within the last two years.
- Severe obesity above the standard weight chart limits.
- Organ or tissue transplant.
- AIDs or HIV (it’s possible to obtain coverage, but it’s very difficult to qualify for).
- Receiving disability benefits.
If you have any of the above health ailments, traditional life insurance products will likely be unavailable to you.
However, it’s probable that you could qualify for burial insurance, graded benefit life insurance, or a modified whole life insurance policy.
Non-Health Related Conditions That Will Likely Cause A Denial For Life Insurance
Life insurance companies assess a person’s life expectancy in multiple ways, and it goes well beyond health history. Your lifestyle is also a major factor. Below are some non-health lifestyle conditions that can cause a life insurance company to deny your application.
- High-risk hobbies: Activities such as skydiving, scuba diving, mountain climbing, racing, rock climbing, and student pilot training can cause an insurer to either decline you or charge you much higher rates. It largely depends on A) which product you’re applying for and B) the details of the high-risk activity.
- Alcohol abuse: Anyone with an impaired ability to stop or control alcohol consumption despite adverse occupational, social, or health consequences is classified as someone who abuses alcohol. This scenario is a universal decline for nearly all products.
- Abuse of prescription drugs: If you use prescription drugs in a manner other than as prescribed, it’s considered drug abuse according to the insurers. They would not accept an applicant who engages in this activity.
- Pending military deployment: If you’re awaiting deployment to a high-risk zone, the insurer will likely deny your application for most products. Once your deployment is complete, it will no longer impede your ability to qualify.
- Use of any illegal drugs: Any consumption of illegal drugs (except for marijuana) will result in a declined application.
- High-risk driving history: If you have DUIs, reckless driving, or numerous driving offenses, the insurer will probably decline your application. If not, expect to pay a hefty premium to offset the increased risk you pose to the insurer.
- Criminal activity: Felony convictions will likely cause a decline in most products if they were within the last 10 years. Furthermore, being on parole will also constitute a declinable condition.
- Incarceration: Being actively confined in jail or prison will always cause an insurer to deny a life insurance application.
- Bankruptcies: Having a bankruptcy will not cause a universal decline for all products. Rather, it will generally only cause a decline if you’re seeking a very large amount of coverage (there are other nuanced variables at play as well).
- Not a legal resident of the USA: Not having legal status to live in the USA is a universal decline for nearly every type of life insurance. Some senior burial insurance policies will accept an undocumented person, but they would need to have a TIN to obtain a policy.
- Insufficient income or net worth: If you want to buy $3 million dollars of life insurance or more, you’ll need to provide financial justification for such a large death benefit. The insurance company will request your tax returns and other documents. Essentially, your income or net worth would need to be sufficient for them to justify the large policy amount.
- Too much insurance: Life insurance companies will not issue a policy to someone if the coverage amount applied for, combined with the amount of existing life insurance, would yield a total amount of coverage beyond their limits. For example, let’s say you currently have a one-million-dollar policy and want another two million. If your income does not justify having a total of $3 million dollars of life insurance, they will reject your application. Instead, they will likely offer a lower amount that puts you within their guidelines.
- Too old: While there is life insurance for seniors over 85, 90 is the absolute top end limit. If you’re 91 or older, you’re not going to be able to get a new life insurance policy.
- Too young: You must be at least 18 to buy your own life insurance policy. If you’re younger than 18, you’ll need a children’s life insurance policy, and your parents, legal guardian, or grandparents would need to buy the policy.
The Type Of Underwriting Very Much Influences The Application Outcome
Underwriting is the process by which an insurer determines the risk of a given applicant. There are four underwriting methods an insurer may employ, depending on the product and company: fully underwrittenFully Underwritten
A type of life insurance underwriting that requires the applicant to undergo a medical exam. In addition, the insurer will formally request copies of all your medical records from every physician you've seen in the last decade. Once all of this data is compiled, the insurer will determine whether you're approved and, if so, which rate classification you're eligible for. These rate classifications typically include: Preferred-Plus, Preferred, Standard, and various Sub-Standard ratings. The better the rating, the lower your premiums will be., accelerated underwritingAccelerated Underwriting
The insurance company taps into databases containing information about your health history, which is all fed into their algorithm. This data, along with your answers to various health and lifestyle questions, allows you to skip the lab tests and physical exam. Ultimately, the insurance company’s algorithm determines if you’re approved and what final price you’ll pay., simplified issueSimplified Issue
Simplified issue underwriting is essentially the same as accelerated underwriting except for A) there are fewer health questions to answer, B) approvals are faster, and C) they often accept more risky applicants. The insurer still gathers health and lifestyle information about you via various databases. That information, along with your answers to the health questions, is fed into an algorithm that determines if you're approved., and guaranteed acceptanceGuaranteed Acceptance
There are no health questions or a medical exam. The insurer literally knows nothing about your health, and therefore, you cannot be denied for any prior medical issues..
The type of underwriting heavily influences how much risk the insurer will accept. While a particular health or lifestyle condition may cause a denial for an accelerated underwriting product, it may not be the case if applying for a fully underwritten one.
For example, let’s assume you don’t want a guaranteed acceptance product. If so, generally speaking, a fully underwritten policy gives you the greatest chance at obtaining coverage if your health or lifestyle history is causing you to be denied for no medical exam products (simplified issue or accelerated underwriting).
It’s vital to understand that this is a nuanced situation, so there is no way to list all the rules that would let someone know up front whether their health and lifestyle history will cause a decline under any particular underwriting method.
Therefore, if you have a challenging health history or an interesting lifestyle, it’s highly recommended that you speak with an experienced insurance agent who can provide accurate expectations about the products you may or may not qualify for.
How Life Insurance Companies Determine Your Eligibility For Non- Guaranteed Issue Products
Life insurance companies will assess your risk profile by gathering various types of information about you. All the data they gather will help them determine whether you’re approved or declined for the product you’re applying for.
Depending on the product, underwriting method, amount of coverage, and company, it may be all or some of the following:
- Health questions: You’ll need to answer questions about your health history. Also, the insurer will order your Milliman report, which provides them with a detailed list of your past and current prescription history and diagnoses.
- Medical exam: Fully underwritten products will require you to meet with a nurse to complete a medical exam. They will note your height, weight, and blood pressure. Also, they will obtain a blood and urine sample.
- Medical records: If you’re applying for a fully underwritten product, the insurer will require copies of all medical records from all physicians you’ve seen in the last 10 years.
- MIB report: Every life insurance company will request a copy of your MIB report to see which other life insurance companies you’ve applied with. Your MIB report will show A) which companies you applied with and B) what medical information was discovered during the application process. Insurers obtain this report to see if there is a medical condition disclosed or discovered by another insurer that you didn’t disclose to the company you’re currently applying with.
- Lifestyle questions: There will be lifestyle questions to answer regarding high-risk activities, occupation, tobacco/nictoine usage, and consumption of alcohol or drugs.
- Financial questions: If you’re applying for a large amount of coverage (generally above 3 million), the insurer will ask about your annual income and net worth. Furthermore, they will also ask about past bankruptcies or child support in arrears.
- Family medical history: Expect questions about whether your immediate family has died, and if so, what the causes of death were.
- Driving history: The insurer will subpoena your driving records.
- Criminal history: The insurer will investigate if you’ve been convicted of any felonies or misdemeanors. Furthermore, they’ll also check if you’re on parole or have been recently incarcerated.
- Other life insurance: They will ask whether you currently have any life insurance and, if so, how much coverage you have. This will be a relevant factor when you’re applying for a large policy. They do this to ensure you’re not overinsured.
What You Can Do If You’ve Been Declined For Life Insurance
If you’ve formally applied for a life insurance policy and been declined, it’s not the end of the road. There are still multiple options to explore.
However, before you explore a secondary option, you should identify the specific reason(s) for the denial. Knowing why you were declined will help you avoid applying with another insurer and product that would decline you for the same reason.
Also, if you were denied because of something in your MIB or Milliman report, you should immediately request copies of the report that caused the denial. If anything is erroneous, it’s a consumer report, which means you have the right to have it corrected. Assuming you do, you can then reapply and obtain an approval.
That all said, here are some other options you can explore to get coverage now:
- Final expense insurance for seniors: Final expense insurance (also called “burial insurance “) is a small whole life policy with very lenient underwriting. These policies will accept extremely high-risk applicants. If you were denied for a traditional life insurance product, there is a good chance that you will qualify for a final expense policy. Also, most applicants can obtain a final expense policy with no waiting period, which means you’d be fully covered immediately. These policies generally cap the coverage around $50,000, so it may not be as much as you want. However, it’s better than no coverage at all. Plus, you can always buy more than one policy from different insurers to increase the total amount of coverage.
- Guaranteed issue life insurance: These policies have no underwriting of any kind. There are no medical or lifestyle questions because you’re guaranteed approval. The primary downfall to these policies is the two-year waiting period. If you die during the waiting period, the insurer will only refund your premiums. Also, these products rarely go above $25,000 in coverage, which means you cannot obtain a large amount of insurance.
- Group term life insurance: If your job offers life insurance, there generally is underwriting that would prevent you from qualifying. Just bear in mind that that group coverage will not remain with you after you leave your job.
- Wait and apply later: You may just need to wait a while for your health to improve before applying again. For example, if you had a heart attack four years ago, waiting until the five-year mark will likely open a lot of options for you that don’t exist currently. Talk with your agent, and they can give you an honest outlook on waiting a while before reapplying. Just be sure you take care of yourself so your health remains stable.
Frequently Asked Questions
Most life insurance products do analyze your prior medications and can indeed deny you based on what is discovered. It comes down to what product you’re applying for, which medications are in question, and when they were last prescribed.
No insurance company will allow one adult to buy a policy for themself and then add another adult to it. Every adult must have their own life insurance policy. Now, you can buy life insurance for someone else, but they would be the insured (not you) and would need to participate in the application process even though you’re paying for it.
Life insurance companies assess each applicant’s risk by estimating their life expectancy. A lower life expectancy translates into a higher risk since there is a greater chance the applicant will die sooner rather than later. A person’s life expectancy is primarily estimated by their current and prior health conditions. High-risk conditions such as cancer or heart disease directly translate into a lower life expectancy on average. In the final analysis, if a health condition, or set of conditions, yields a life expectancy that is too low, the insurance company will deny the applicant on the basis that it’s too high risk to extend coverage to that individual, given that they will statistically not live long enough for the insurer to make a profit. To the contrary, it would be more likely that the insurer would lose money by insuring said individual. All that said, it’s critical to note that the type of product you’re applying for and the underwriting method both heavily influence how much risk the insurer will accept. So while one product may result in a denied application, an entirely different product may result in an approval.
- Nationally licensed life insurance agent with over 16 years of experience.
- Personal annual production that puts him in the top .001% out of all life insurance agents in the nation.
Anthony Martin is a nationally licensed insurance expert with over 16 years of experience and has personally served over 10,000 clients with their life insurance needs. He frequently authors entrepreneurial and life insurance content for Forbes, Inc.com, Newsweek, Kiplinger, and Entreprenuer.com. Anthony has been consulted as an expert life insurance source for dozens of high-profile websites such as Forbes, Bankrate, Reuters, Fox Business, CNBC, Investopedia, Insurance.com, Yahoo Finance, and many more.
- Nationally licensed life insurance agent with over 20 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 20 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 15 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 15 years of experience. He has personally helped more than 1,500 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest YouTube channels to help aspiring insurance agents serve their clients better.
- Nationally licensed life insurance agent with over 20 years of experience
- Best selling Amazon author.
Jeff Root is a nationally licensed life insurance expert with over 20 years of experience. He has personally helped over 3000 clients with their life insurance needs. Jeff is a best-selling Amazon author and the managing partner of a highly successful insurance brokerage that manages over 2,500 licensed insurance agents across the USA. He has been a featured life insurance source for prestigious websites such as Forbes, Bloomberg, MarketWatch, Nerdwallet, and many more.
- Nationally licensed life insurance agent with over 15 years of experience
- Best selling Amazon author of five insurance sales books.
David Duford is a nationally licensed insurance expert with over 15 years of experience. He has personally helped more than 1,500 clients buy life insurance. David has been featured as an expert source for highly authoritative publications such as A.M. Best and Insurancenewsnet. He also runs one of the largest YouTube channels to help aspiring insurance agents serve their clients better.
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mental incapacity. https://www.merriam-webster.com/medical/mental%20incapacity
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abuses alcohol. https://www.niaaa.nih.gov/publications/brochures-and-fact-sheets/understanding-alcohol-use-disorder
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Milliman report. https://www.rxhistories.com/our-company/
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MIB report. https://mib.com/
