What Should I Do If I Have Problems In Getting Life Insurance Coverage?

Of course, life insurance companies cannot issue policies to everyone just because they want it. Then you would have terminally ill people purchasing high amounts, not paying very much into the policy, they would die soon after and the insurance company would have to pay out the cash amount of the policy.

Generally, the life insurance company underwrites the applicants for policies. It is usually a simple process:  most often it is not more than a few questions about gender, age, weight, health history and smoking habits. If they are satisfied with the answers, the policy is issued; if not, then additional underwriting is required. As the amount of insurance that one would like to buy or in the case of older individuals, a physical would be required.

The underwriting process is designed to weed out those that would be considered uninsurable, such as the terminally ill or those with certain medical conditions. Premiums can increase in the case of those with weight issues, smokers or certain health conditions.
Then there are some companies that will only write people that are the healthiest and they manage to do so at really great rates. Then some companies will take the chance on those that are a little less healthy. It all depends on the company’s guidelines and the individual’s situation.
If you have health conditions before you apply for an insurance policy, be careful. Not always is cheapest the wisest way to do. If the company turns you down or rates you higher, this can hurt you in the long run when you apply with other companies. One of the standard questions by underwriters is, “have you been rated or denied coverage?”  If you lie on any question, the company can exercise its right of using a 2 year contestability period.
If you have problems getting individual coverage, you can try these ideas:
  1. Check into your employer’s insurance, they may offer life insurance. If so, you can usually get group coverage without being rated and your rates will be affordable.
  2. Try “cash value life insurance”, such as whole or universal life. They are sometimes easier to get than term life.
  3. Check into if you are eligible for life insurance that would not require underwriting, they are not the best policies, and generally have a 2 year waiting period. But, it is better than not having anything at all.
  4. Give some thought to Accidental Death and Dismemberment; this only pays off if you die in an accident, once again, not the best-but better than nothing.
  5. Credit card insurance, unbelievably expensive, but an option to consider.
  6. No insurance, this would allow you to save the money that would be spent on premiums for your surviving family.
  7. Try to change your health conditions to make it easier for you to qualify for insurance. Lose weight, stop smoking, etc.
  8. After your health issues have been addressed, reapply.