Why Was I Denied Life Insurance?

Life insurance companies are typically for-profit. They make money via your premiums, with the expectation that the payout won’t occur until after enough premiums have been collected to cover costs and turn a profit.

Of course, sometimes policyholders pass away early. In these instances, life insurance companies lose money on the policy payout. 

This is why insurance companies deny coverage or charge a higher premium if they believe there’s a high risk they’ll have to pay out before the premiums can make up for the costs. 

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Reasons Life Insurance Is Denied

With life insurance, you make monthly payments while you’re alive, and then the insurance company makes a tax-free payout to your beneficiaries if you pass while the policy is active. 

The size of the payout depends on your policy and premiums — higher premiums are generally associated with higher payouts or higher mortality risk. 

The risk factor is why you might have life insurance denied completely. If the insurer thinks the policy wouldn’t be profitable for them, they’re likely to deny you.

Health and pre-existing conditions

Health issues that could lead to rejected coverage include:

• Chronic illness
• High cholesterol or glucose levels
• Diabetes
• Obesity
• High blood pressure
• Previously having a heart attack or cancer 

If you’re rejected for any of these reasons, you’ll need to demonstrate that you’re receiving consistent treatment and that your condition is being managed and improving. 

Dangerous hobbies and lifestyle

Having dangerous hobbies (skydiving, rock climbing, scuba diving, piloting planes, etc.) likely won’t lead to rejected coverage but could drive your premiums higher. 

If you hide these hobbies when you apply, the insurance company may be able to deny a life insurance payout.

Driving record

A poor driving record could lead to higher premiums or even being denied coverage completely. 

For example, speeding tickets could cause higher rates, but multiple instances of driving under the influence or having multiple reckless driving charges could lead to an outright rejection. 

Tobacco use

Smokers can pay as much as double the premiums as non-smokers — this includes traditional cigarettes, e-cigarettes, vape pens, cigars, and chewing tobacco. 

Even nicotine replacement products such as gum and patches used to quit smoking can count as smoking to insurers, though some companies may offer better rates for disclosing these products. 

To qualify as a non-smoker, you have to be nicotine-free for at least one year.

Application inaccuracies and omissions

If the insurance company discovers that you’ve intentionally submitted an inaccurate application or omitted information, then it may deny your application. 

Further, if the application goes through, you may end up with a denied life insurance payout even after years of paying premiums if they determine you lied on the application to get better rates. 

Drug use

Illegal drug use may be a clear reason for denial, but even the regular use of legal prescription drugs may make insurers doubt your underlying health. 

READ MORE: How Does Life Insurance Work and Do You Really Need It?

What To Do If You Can’t Get Life Insurance

Being rejected for life insurance can be unnerving, especially if you have young children who would need financial help if you were gone. 

Thankfully, you may still be able to reapply or try other forms of insurance instead.

Here’s what to do:

1. Find out why you were denied

If you've been denied, the first thing you should do is write or call your insurance agent and find out the reasons for the denial. 

If there were mistakes in the application, this will be an opportunity to correct those mistakes.

If there were specific health or risk factors that caused the denial, you can start working to address those for a future application. 

2. Confirm the results

If the results are from your medical exam, you can reach out to your doctor to make sure the results are accurate. 

If they are accurate, you can discuss with your doctor how to improve your health over time. 

3. Talk to an insurance agent

A licensed insurance agent with knowledge of your personal history and recent application denial may have insights on alternative options. 

For example, a broker may have relationships with many different insurers and can recommend one that specializes in clients with your risk profile. 

4. Wait and reapply

There may be certain issues that you need to address with your health, such as becoming nicotine-free for a year, or reducing your blood pressure. 

If you can get clarity on the denial reasons and work with your doctor towards fixing these issues, then you may be able to successfully apply in the future.

5. Apply to different insurance companies

Each insurance company has its own standards and underwriting processes. It may be that one company’s rejection may instead be higher premiums with another company. Or another company may feel more comfortable with clients with your risk profile. 

If you're not sure where to start, you can use a marketplace like Policygenius life insurance to sort through different options based on your circumstances.

You’ll likely have to repeat the application process, but applying to a new insurer could be a faster path to obtaining coverage than trying to assuage the concerns of an insurer that denied you coverage. 

6. Try alternative insurance products

In the event you’ve been denied and unable to obtain term life insurance, you may want to seek out alternatives while working to address the problems in your application. 

Term insurance is typically the most affordable option, but there are alternatives such as:

• Final expense life insurance: A type of permanent life insurance with lower payouts, meant to cover end-of-life costs.
• Guaranteed life insurance: A type of final expense life insurance that requires no medical exam or medical questionnaire. It is guaranteed for nearly everyone and generally covers end-of-life expenses. 
• Group life insurance: Typically doesn’t require a medical exam and is often available at a subsidized rate through your employer. But it likely isn’t portable if you leave and may have relatively low payouts.  

READ MORE: How Much  Life Insurance Do I Need for My Family?

FAQs

What medical conditions prevent you from getting life insurance?

Some health conditions that could cause a rejection include high blood pressure, diabetes, and cancer. Demonstrating that your condition is being treated and under control may lead to a future acceptance, albeit at higher premiums. 

If you cannot obtain life insurance coverage due to bad health, you may want to consider alternative insurance products that do not require a medical exam.

Can life insurance be denied due to weight?

Being overweight typically shouldn’t lead to a denial of coverage, but likely drives higher premiums, especially if you’re at risk for other health issues such as diabetes. 

If you’ve recently lost weight, insurers may use reports of higher weight to make their decisions, so you may want to wait six months or longer to apply to obtain lower premiums.  

Can you be denied life insurance for having a poor credit score?

Insurers are starting to use credit scores to automate underwriting and measure if you may have difficulties paying premiums. A poor credit score typically shouldn’t lead to a denial of coverage but may drive higher rates. 

TL;DR: Next Steps If You’re Denied Life Insurance

If you’re denied life insurance, you’ll want to confirm the medical results, then talk with your doctor and insurance agent on how to improve your application. You may be able to reapply or find an alternate insurance company.

Or, you may want to pursue other types of insurance, such as guaranteed life insurance or group life insurance through your employer.

While it may be tempting to lie on your application, if you’re found out, that could mean a quick rejection. Worse, if they find out after your death, they could deny the payout to your beneficiaries — regardless of all those years you paid premiums. 

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