Turned Down for Life Insurance? – Here’s What to Do

You're in good health and see your doctor regularly. So what can you do if your life insurance application is declined based on the results of the medical exam? Realize first that life insurance companies are in the risk-assessment business - not the diagnosis business.

Medical underwriters specialize in classifying risks. When they find something abnormal - high levels of liver enzymes or high blood sugar for example - you may be declined for life insurance coverage rather than the underwriters taking a guess as to the exact nature of the problem.

First - get the documents for being declined
Ask the insurance company for specific details of why you were declined. Some states permit the information to be sent directly to the applicant. In other states, any medically related reasons may require the information to be sent to a physician of your choice.

If the reason for the declination was lab work done as part of your application, a copy of the lab work will be sent to the doctor. If the reason was information contained in a physician's report, then the specific reason - and possibly a copy of the report from which the information came - can be sent to a doctor to be reviewed with you.

Second- determine if you really have a medical problem or a mis-appraisal of your situation
Once you know why you were declined, go to your doctor. You and your doctor should find out if there’s something wrong with your health. Life insurance applications have may save lives by alerting the applicants to serious medical problems.

Have your doctor give you tests to check the risks for which you were declined life insurance. Possibly he can show that the underlying risk(s) is unsupported. Providing the life insurance company with the results of tests that show you do not have medical conditions associated with the results of your insurance medical exam can go a long way toward helping you buy an affordable life insurance policy.

You should also make your case to your insurance agent. He can help you argue for a better priced policy and make sure all of your medical information gets to the right people.

Even if all tests come back negative, you may face some challenges in buying life insurance in the future because insurance companies have access to the results of your previous insurance exam through the Medical Information Bureau (MIB) - a clearinghouse of medical information that insurers share.

It is up to you to inform your proposed life insurer about your circumstance. Have your doctor send all of the relevant tests. Negating troubling risks that a medical underwriter may find, can help you get more affordable policy. Assessment of your health is subjective and you can take steps to influence the subjective appraisal.

The purchase of life insurance involves costs, fees, expenses and potential surrender charges and depends on the health of the applicant. Not all applicants are insurable. If a policy is structured as a modified endowment contract, withdrawals will be subject to tax as ordinary income and withdrawals prior to age 59 ½ are subject to a 10% penalty.