10 Reasons You Could Be Denied For Life Insurance

November 2, 2022

Life insurance is one of the more unique and essential forms of insurance. Unlike other types of insurance, the person who takes out a life insurance policy will not financially gain from it, as the plan is paid to their chosen beneficiaries and is paid out upon their death. However, insurance companies are not charities. They will not award life insurance to everyone, especially those who could be dead soon after taking out a policy as that would put their business at risk. Here are ten reasons one could be denieda life insurance policy.

Alcoholism

One will not be denied life insurance based on drinking alone, but the body reveals things one might not want to admit to an insurance provider. Chronic drinkers and alcoholics are more likely to have a positive alcohol marker based on the quality (or lack thereof) of their liver. Since this is something that is detrimental to one's health and puts them at risk for dying sooner than others, insurance providers are unlikely to provide a policy forthese individuals. Those who are dealing with alcoholism and wanting to take out a life insurance policy should refrain from applying until they have adequately become sober.

Dangerous Work

An applicant could be in optimal shape and at no risk for disease or death, yet a life insurance provider may still be reluctant to offer them coverage because of their occupational choice. Working in a dangerous field such as logging, fishing, truck driving, and flying airplanes could be the deciding factor in whether or not one is denied life insurance. The insurance company will not want to risk giving insurance to an applicant who might have a mishap at work shortly after that could cost them their lives. Even if they are a completely competent individual and have no prior accidents, there is no guarantee they will be offered coverage.

Drugs

Similarly to alcohol abuse, using drugs could put one at risk for not receiving life insurance coverage. If the applicant is using drugs regularly, then they should not expect to receive life insurance as even marijuana users are denied in some states. Instead, one should take necessary measures to overcome an addiction before applying by visiting a rehabilitation center, taking counseling and regularly attending group meetings with those in similar situations. One's health is important, not only to receive a life insurance policy but also for them to enjoy life in the best way possible.

Risky Habits

Even if the applicant is in good health and is employed in a low-risk profession, they could still be denied for life insurance based on their hobbies. Rock climbing, bungee jumping, and skydiving are all recreational activities that fall under grounds for denial. This list could also include lower risk activities such as snowboarding and scuba diving. If an applicant is looking to take out a life insurance policy but enjoys these sorts of activities, they might want to give them up before talking to an insurance provider. Although these events are a source of excitement, they could be a hindrance to being approved for life insurance.

Cancer History

Cancer is a serious condition that can affect one's life greatly, even if the disease is in complete remission. A new life insurance policy application can be denied if the applicant has or has had cancer. There are specific factors that determine the results, such as what type of cancer the applicant was diagnosed with and the length of their remission. It is best to do as much research as possible to determine whether or not cancer is likely to be a hindrance when applying for a life insurance policy.

Weight Issues

Being overweight is an issue in some cases when applying for a new life insurance policy. Obese individuals are at a higher risk of many different health complications, including premature death, type 2 diabetes, and heart troubles. An insurance provider might see an overweight applicant and immediately be concerned about how they would be able to insure them based on their potential medical issues. When reviewing an applicant's health history, an insurer might find further reason to deny them a policy, or at least, not one with the standard weights. It is best for overweight individuals to focus on their health issues before applying for a life insurance policy.

Dangerous Driving

Driving is a typical daily activity that can simultaneously be one of the most dangerous ones. An applicant will not be denied for life insurance solely because they drive a vehicle, but if their record shows a history of reckless or poor driving, denial could be imminent. This includes things like speeding, reckless driving, and driving under the influence charges. If an applicant has a checkered history on their driving record, it is suggested that they wait for the charges to expire before applying for life insurance.

Low Income

Insurance companies are businesses, and businesses have to make decisions based on finances. Because of this, an applicant who falls below a certain income threshold could be denied for coverage. Granting insurance to too many people in a low-income bracket could mean the premium flows of insurance companies are significantly affected. There also needs to be a reasonable argument made for the policy and its total amount as there should not be a large disparity between the income of someone who takes out a life insurance policy and the value of their policy.

Past Denials

Insurance companies are closer linked than one might think. If one company denies an application for health or life insurance, they cannot just go to another company and expect a completely unbiased start. Insurance companies utilize the Medical Information Bureau, which holds records of life insurance applications (among other things). This is to prevent those individuals who lie on life insurance applications from trying to pull off the same scam on other companies after being denied. It should be said that being denied for a life insurance policy by one company does not mean the applicant will never be approved by another company. This is especially true if the reason they were declined in the past is no longer an issue, such as a cured disease or rehabilitated drug use.

HIV/AIDS

HIV and AIDS were once a considerably larger issue for those seeking to obtain a life insurance policy. Although the issue has now been reduced, it is still considered a potential liability. Treatment methods for HIV/AIDS have greatly improved over the years. However, some insurance companies might still be reluctant to provide coverage, at least with average rates. For these types of long-term conditions, an applicant should shop around and research companies who are more willing to provide coverage for people with HIV/AIDS and similar conditions.

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