Declined for Life Insurance? Here's What to Do Next
A life insurance decline from one company does not necessarily mean every company will decline you.
The most important thing is figuring out why you were declined before you apply again.
QUICK ANSWER
If you've been declined for life insurance, don't immediately start applying to every company you can find.
First, determine why the insurance company declined the application.
The reason might be a medical condition, lab result, prescription history, build, driving history, medical record, pending test or a combination of factors.
Once you know the reason, you can determine whether another carrier, additional information or simply waiting may make sense.
Why Do Life Insurance Companies Decline Applications?
Life insurance companies evaluate mortality risk.
When an underwriter believes an applicant falls outside the company's acceptable risk guidelines, the company may decline or postpone the application rather than offer a policy.
Reasons can include:
- Heart disease or recent cardiac procedures
- Poorly controlled diabetes
- Significant obesity combined with other health conditions
- Untreated or poorly controlled sleep apnea
- Certain cancer histories
- Abnormal liver or kidney findings
- Pending medical testing
- Recent hospitalization or surgery
- Prescription history
- Alcohol or substance history
- Driving history
- High-risk activities or occupations
- Information found in medical records
A decline can also result from several smaller risk factors that become more significant when considered together.
Don't Just Start Applying Everywhere
This is one of the biggest mistakes people make after a decline.
They assume the answer is to submit applications to several more insurance companies and hope one says yes.
More applications are not necessarily better applications.
If the reason for the original decline is something every traditional carrier is likely to view the same way, immediately applying elsewhere may accomplish very little.
On the other hand, if the first carrier was unusually conservative about your particular health history, another company may be worth considering.
THE BIG LOU PRINCIPLE
One company's decline is one company's underwriting decision.
Life insurance companies do not all evaluate risk exactly the same way.
One carrier may be more comfortable with diabetes. Another may be more favorable with treated sleep apnea. Another may have a different appetite for certain cardiac histories or build ranges.
The health history stays the same. The underwriting manual can change.
Find Out Why You Were Declined
Before deciding what to do next, try to identify the specific reason for the underwriting decision.
The insurance company may send you a letter explaining the general basis for its decision or tell you how to request additional information.
Sometimes the issue is something you already know about.
Other times, underwriting uncovers information in medical records, prescription history or other reports that the applicant did not realize would be significant.
You can't choose the right next step until you understand what caused the first decision.
What Is the MIB?
MIB is a consumer reporting agency used by many life and health insurance companies as part of the underwriting process.
MIB information can help insurers identify information reported in connection with prior insurance applications.
MIB does not make the underwriting decision and does not determine whether you are approved or declined.
If you believe information in your consumer file may be inaccurate, you can request your file directly from MIB and follow its process for disputing information.
Different Carriers Can Reach Different Decisions
A life insurance decline is not always a universal verdict.
Insurance companies have different underwriting manuals, risk tolerances, products and reinsurance arrangements.
That can produce different outcomes for the same applicant.
But this does not mean another company will automatically approve a case that was declined elsewhere.
The key is determining whether the reason for the decline is something another carrier may legitimately view differently.
Declined vs. Postponed: They Are Not the Same Thing
Sometimes an insurance company does not want to make a permanent decision yet.
Instead, it may postpone the application.
A postponement can happen when:
- A medical test is still pending
- You recently had surgery or a procedure
- You recently started or changed medication
- A condition has not been stable long enough
- Additional follow-up is needed after a cardiac event
- There is a recent cancer diagnosis or treatment
- The insurer wants to see a longer period of stability
In those situations, immediately applying to another company may not be the best strategy.
Sometimes the best underwriting strategy is simply time.
What If the Medical Records Are Wrong?
Medical records can contain errors, outdated diagnoses or notes that do not accurately reflect your current condition.
If underwriting relied on inaccurate medical information, simply applying to another company without addressing the underlying record may not solve the problem.
You may need to discuss the record with your healthcare provider and determine whether it can appropriately be corrected or clarified.
The goal is not to change legitimate medical history. It is to make sure the information being used is accurate.
What If I Was Approved, but the Rate Is Much Higher Than Expected?
A high rate is different from a decline, but the same basic process applies.
Find out why the insurance company changed your rate class.
Was it your build?
A lab result?
Sleep apnea?
Diabetes?
Something in the medical records?
Another company may or may not view that issue differently.
Understanding the reason allows you to make that decision intelligently.
See how life insurance rate classes work →
Don't Let a Mythical Rate Become the Problem
Sometimes the applicant wasn't really “rated up” from a realistic expectation.
The original quote may simply have assumed a rate class the applicant was unlikely to receive in the first place.
That's what Big Lou calls a mythical rate.
Anyone can quote you a low price. The trick is getting a policy issued at that price.
How Big Lou Reviews a Declined Case
Big Lou's job is not to promise that we can overturn every decline.
We can't.
Our job is to understand what happened and determine whether another legitimate underwriting path may exist.
That usually means:
- Understand the prior decision. What did the insurance company object to?
- Review the health history. What diagnoses, medications, tests or records are relevant?
- Determine whether the information is current and accurate.
- Compare carrier underwriting. Is there another company that may legitimately view the risk differently?
- Decide whether to apply now or wait.
Sometimes we find another path. Sometimes the right answer is to wait. And sometimes the original decision is likely to be the same elsewhere.
We'd rather tell you that than send applications everywhere just to see what happens.
What Information Should I Have Before Calling?
If you were declined or postponed, it helps to know:
- Which insurance company made the decision
- When you applied
- What coverage you applied for
- The reason the company gave for the decline or postponement
- Any major diagnoses or medical procedures
- Your current medications
- Any recent or pending medical tests
- Whether your health has changed since the application
Don't worry if you don't know everything. Start with what you know.
Already Have an Offer? Don't Throw It Away.
If you were approved but don't like the rate, be careful about giving up an existing offer before you know whether another company can actually do better.
A second opinion does not require you to pretend the first offer doesn't exist.
Keep the option you already have while you find out whether there is a better one.
Frequently Asked Questions
Can I get life insurance after being declined?
Potentially. A decline from one insurance company does not automatically mean every company will decline you. The reason for the original decision and your current health profile determine whether another carrier or underwriting path may be appropriate.
Should I apply to another company immediately after a decline?
Not necessarily. First understand why you were declined. In some cases another carrier may be worth considering immediately. In others, additional information or waiting may be the better strategy.
Will other life insurance companies know I was declined?
Insurance applications may ask about prior applications or adverse underwriting decisions, and insurers may use consumer reporting information during underwriting. Answer application questions accurately.
Does MIB decide whether I can get life insurance?
No. MIB is a consumer reporting agency used by many insurers as part of underwriting. The insurance company makes its own underwriting decision.
What is the difference between declined and postponed?
A decline means the insurer is unwilling to offer coverage based on the information it reviewed. A postponement generally means the company is not willing to make an offer now but may reconsider after more time, additional testing or a period of stability.
What if I was declined because of incorrect medical information?
Determine what information the insurer relied on. If a medical record contains an actual error, discuss it with the healthcare provider responsible for the record and determine whether it can appropriately be corrected or clarified.
Can Big Lou guarantee another company will approve me?
No. No brokerage can guarantee an underwriting decision. Big Lou can review the circumstances and help determine whether another carrier or strategy may be worth considering.
What if I was approved but the premium is much higher than quoted?
Find out why the insurance company changed the underwriting class. Depending on the reason, another carrier may evaluate the issue differently. Keep the existing offer available while you determine whether another option is realistically better.
Get a Second Opinion Before You Give Up
If you've been declined, postponed or approved at a much higher rate than expected, tell Big Lou what happened.
We'll help you understand the underwriting decision and determine whether another carrier or another strategy may make sense.
Sources & Consumer Resources
MIB: Consumer information and instructions for requesting your MIB Consumer File.
Consumer Financial Protection Bureau: Consumer reporting information and rights regarding inaccurate information in consumer reports.
Disclaimer: This page provides general educational information and is not a guarantee of life insurance eligibility, approval, rate class or premium. Underwriting guidelines and product availability vary by insurance company, state, product and individual applicant. Big Lou/TermProvider cannot guarantee that another insurer will approve an applicant who has previously been declined or offer a more favorable rate.