Four Reasons You May Get Declined after Your Term Life Insurance Exam.
The life insurance underwriting process is a way for insurers to determine an applicant’s eligibility for coverage. An underwriter weighs the risks associated with approving someone who wants to buy a particular life insurance policy.
The result of this evaluation enables an insurer to assign a rate class to an individual who wants to purchase life insurance.
At the same time, the underwriter can decide that an applicant is too much of a risk to insure.
The various rate classes allow an insurance company to provide most people with some kind of affordable life insurance coverage, while reducing an insurer’s exposure to high risk applicants.
Why You May Get Declined after Your Term Life Insurance Exam.
You may get declined for coverage after your Term Life insurance exam because of a variety of health-related factors. Some of these things may be reversible with an improved lifestyle, increased exercise and a superior diet. Other factors may be a warning sign of something more serious, which requires a specialist’s attention. The following factors may negatively impact your chances of getting coverage:
High PSA Levels.
A high PSA level – one that exceeds the 0-4.0 range, or a reading that is higher than your last exam – may mean you are at risk of developing prostate cancer. Even if there no additional risk factors, an underwriter may decline to issue an applicant coverage, or the underwriter may require that person to undergo more tests (and a needle biopsy) before approving or declining coverage.
High Creatine Levels.
High creatine levels may be an indication of serious liver and/or kidney problems, causing an underwriter to decline coverage for an applicant. Also, an applicant who is borderline diabetic and has high creatine levels –a BUN (Blood Urea Nitrogen) test will often reveal these numbers – may be at risk of developing serious medical complications, which may require long-term medication or surgery.
A1C Levels Are High.
An A1C test is a means of diagnosing diabetes. If an applicant’s A1C levels are high, and they may be several explanations (besides diabetes) for such a reading, those numbers can cause an underwriter to decline coverage. The normal range is, according to the Mayo Clinic, 4.5 to 6 percent. 6.5 percent or higher on two separate tests is confirmation of diabetes.
Drugs and/or Other Illicit Substances.
If a medical exam reveals that an applicant has nicotine and/or illicit drugs in his or her system, an underwriter can decline that applicant’s request for coverage. Alcohol and drugs are definitely not acceptable to underwriter who is in the midst of evaluating a Term Life insurance application.
What Options Do You Have If You Get Declined after Your Exam?
If you get declined after your exam, you always have the option of applying for similar coverage with another life insurance company. You will have to go through the underwriting process again, which may be more or less stringent than the one where you were decline.
Alternatively, you can get an accidental death and dismemberment (AD&D) insurance policy that pays death benefits to a designated party if your cause of death is an accident. This type of insurance is often less expensive than most forms of life insurance.
And finally, there is Guaranteed Issue Insurance (GI) or graded death benefit policies that issue proceeds because of the loss related to a specific financial event.
These options should be considered after you have been declined by an underwriter.
More importantly, these options should be explained to you in full by an independent life insurance professional. That independence gives an agent the necessary perspective – there is no conflict on his or her part – to find a solution that best meets a customer’s unique circumstances.