Being declined for a life insurance policy can leave you feeling anxious about the insecurity over your loved ones in the case of your death. That’s why it’s important to know the top reasons why life insurance applications are declined, and what you can do to help your chances of getting accepted. We’ve asked Chantal Marr and Lorne Marr of LSM Insurance to shed some light on this topic. Chantal is a licensed life insurance broker who is often interviewed by media. Lorne Marr also regularly contributes to such Canadian publications as Money Sense and the Toronto Star. Lorne Marr also publishes his own blog about health and fitness – Fit After 45.
What Are the Main Reasons Why an Insurer May Decline Your Life Insurance Application?
1. Stroke: Insurers will typically differentiate between more major types of stroke (Ischemic Stroke and Hemorrhagic Stroke) and minor ones (Transient Ischemic Attack). One possible outcome is that your life insurance application may get declined or postponed until you can demonstrate a long enough period of being in stable condition.
2. Obesity: If an insurer decides that your body mass index (BMI) is too bad, your life insurance application may be declined. The good news is that this is something you’re most likely able to change by getting in shape.
3. Foreign Travel: Are you planning to travel to a dangerous or instable region? An insurer can decline your life insurance application, exclude your trip from the policy, or start your policy once you are back. Each insurer has a unique perspective of what it considers a dangerous geographical region to be (e.g. the Middle East).
4. Alcohol Use: If you have a history of excessive drinking, you may find your life insurance premiums to be significantly high, or even cause your life insurance application to be declined. It would be beneficial if you monitor your habits, and can demonstrate that you’ve stopped drinking for at least 1 year (can vary across insurers).
5. Drug Use: Drug use is a no-go for life insurance. You will need to spend a few years being clean in order to qualify for life insurance again.
6. Dangerous Recreational Activities and sports: Doing rock climbing, paragliding or sky diving professionally? Your life insurer may have a problem with this, so investigate your options thoroughly. Some providers offer a high-risk insurance policy that includes such activities.
7. Cancer: Life insurers see cancer as very high-risk. Your application success will strongly depend on the type of cancer, stage and grade. The application acceptance outcomes can vary across numerous life insurers, so it’s a good idea to involve a knowledgeable life insurance broker to help with your search.
8. Heart Disease: Having a heart disease (e.g. Coronary Artery Disease) does not mean that it is impossible for you to get life insurance, but the amount of companies who would be willing to offer you a policy can be somewhat limited.
9. Liver Disease: There are different types of liver diseases such as Hepatitis (liver inflammation), and cirrhosis (irreversible liver scarring and damage ), or liver damage due to alcohol abuse or biliary obstructions such as gallstones, that can affect your life insurance application. Many cases can be insured, but it will depend on your particular situation and life insurance provider.
10. Diabetes: As a diabetic you’re likely to get life insurance, especially if you do not have multiple health issues such as other diseases, alcohol abuse, or a smoking habit. The situation can become more complicated though if you have uncontrolled diabetes. Not every insurer covers diabetes cases so you may want to work with an insurance broker who has experience in this area.
11. Parkinson’s Disease (PD): This disease is a progressive disorder of the nervous system. It affects several regions of the brain, especially an area that controls balance and movement resulting in trembling or shaking (called tremors of a limb), even when the body is at rest. This condition can be insured, especially in the early stages where there are minimal localized tremors and no treatments are required. It is harder to get a life insurance coverage in more advanced stages, but there are special insurance products created for such cases.
12. Lupus: This is a disease where the immune system becomes hyperactive and attacks normal, healthy tissue. Lupus may result in inflammation, swelling, and damage to joints, skin, kidneys, blood, the heart, and lungs. Your ability to get a life insurance policy will depend on the type of lupus, your health stability after the diagnosis, and other factors.
13. Dangerous Occupation: Some jobs are more dangerous than others. There is a chance that your life insurance application could be denied if your job is considered too dangerous. (e.g. miner, pilot, offshore diver, offshore drilling platform worker, police bomb squad team member, etc).
14. HIV or Aids: In the past it was almost impossible to get a policy while suffering from AIDS, but this is now changing.
15. Uncontrolled Blood Pressure: This health problem can be a reason for an insurance company to decline your application. If your blood pressure is high but can be controlled medically, there will be some companies who may underwrite you. Specific types of life insurance products can help you get insured (see the end of the article).
16. Multiple Sclerosis: A disease in which the insulating covers of nerve cells in the brain and spinal cord are damaged. It may result in deterioration of the nerves, which is a non-reversible process. Not all insurers will offer life insurance for customers suffering from Multiple Sclerosis, but some may do so.
17. Kidney Disease: Kidney disease can encompass several conditions such as kidney stones, glomerulonephritis, proteinuria, and renal Insufficiency. Your ability to get life insurance will depend on several factors such as disease stage, life insurer ability to insure you, type of life insurance policy, etc. Many cases of kidney disease are insurable if you work with a life insurance broker specializing in this area.
18. ALS: Amyotrophic lateral sclerosis (ALS), often called “Lou Gehrig’s Disease,” is a progressive neurodegenerative disease. It strongly affects nerve cells in brain and spinal cord. This disease falls into a high-risk category.
19. Other diseases: Colitis or Crohn’s, Emphysema etc: While many insurers refuse to issue a life insurance policy in these cases, it is important to work with an insurance expert who has experience with insuring your particular disease. They may be able to offer products which would cover you for your particular case.
20. Careless Driving or DUI: Since careless driving poses a life-threating situation, some insurers can either deny a life insurance application or even cancel an existing one. Try to instil good driving habits in order to avoid unnecessarily risking your own life, or the lives of others.
What Can You Do If One or Several Reasons Apply to You?
1. Find the right insurer: Not all insurers think in exactly the same way. Each company has its own unique grouping of risks for which they are more tolerant towards, and so some will insure what others may not. Don’t search for these companies on your own. It’s a good idea to seek out a life insurance broker who works with many life insurance companies out there, and who has experience with high risk life insurance topics. Feel free to connect with Chantal Marr from LSM Insurance (who helps Canadians from all provinces in complex life insurance situations), using our mini form on the left side of the page.
2. Alternative life insurance policies: Not every policy requires a detailed medical assessment, so have a look at other life insurance policy types. Guaranteed Issue and Simplified Issue Insurance are examples of life insurance types that are more tolerant towards risks. First look at Simplified Issue Insurance if it appears that you might be declined for a traditional life insurance. If you need a life insurance policy to take care of particular expenses e.g. your last expenses, you might want to find out more about funeral insurance for seniors.
3. Change the situation yourself: You have the power to influence some of the reasons that your life insurance application is being declined. Stop drinking, no drug use, start driving safely, get in great physical shape, and many of the reasons to be declined for life insurance will disappear.
Chantal Marr is a licensed life insurance broker and a head of LSM insurance, one of few insurance brokerages working nearly all life insurance providers and offering life insurance across all Canadian provinces.She is a member of the Independent Financial Brokers of Canada. Much of her success stems from her ability to listen to her clients’ needs. If you are interested to find out more about Life Insurance Savings and connect with Chantal for a free quote / assessment of your situation, please complete and submit the small form on the left.
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