As we work together to provide clients with the best life insurance options, it’s essential to be aware of the common reasons people might be denied coverage and how we can address these challenges. Here are three primary reasons for life insurance denial and my solutions to help you assist your clients more effectively.
1. Health Issues
Challenge: A history of severe health conditions, such as heart disease, diabetes, or cancer, can lead to a denial of life insurance. Insurers assess the risk of insuring an individual based on their health, and certain conditions may be considered too high-risk.
Solution: I recommend offering clients alternative products like guaranteed issue life insurance or graded benefit policies. These policies may come with higher premiums or lower coverage amounts, but they provide an option for those who might otherwise be uninsurable. Additionally, encourage clients to maintain a healthy lifestyle, as improved health over time could lead to better terms.
2. Dangerous Occupations or Hobbies
Challenge: Clients who work in high-risk professions (e.g., pilots, construction workers) or engage in dangerous hobbies (e.g., skydiving, scuba diving) may face denial due to the increased risk associated with their activities.
Solution: For these clients, look into specialty insurers who understand the unique risks of these occupations and hobbies. I can assist in finding carriers that offer tailored policies for high-risk individuals. It’s also important to thoroughly document any safety measures or certifications the client holds, which could positively influence underwriting decisions.
3. Financial Issues
Challenge: Life insurance can be denied if the client has a history of financial instability, such as bankruptcy or excessive debt. Insurers may view this as a red flag, questioning the individual’s ability to maintain premium payments over time.
Solution: Help your clients by advising them to stabilize their financial situation before applying. If they’ve recently come out of bankruptcy or are managing debt, showing a record of consistent payments and financial improvement can improve their chances. Additionally, considering smaller policies or term life insurance may be more affordable and accessible options in the interim.
I’m here to support you and your clients through these challenges. If you have any cases where a client has been denied or if you’re unsure of how to proceed, please don’t hesitate to reach out. Together, we can find solutions that ensure more of your clients are protected with the coverage they need.