What To Do If Denied Life Insurance?

It’s time to hire a professional if you haven’t already. At a moment like this, an independent life insurance agent can be a lifesaver.

Agents also have an advantage in that they are familiar with the ins and outs of the life insurance underwriting process (all the behind-the-scenes stuff that decides if your application is approved or denied).

As a result, an agent should be able to detect—and work around—any red flags in your application that may have led to your first denial. It’s also worth remembering that just because one company rejects your application, it doesn’t mean that other insurance companies will reject your application.

Rather than searching the internet on your own (and hope to discover a firm that would accept you), agents can explore a far larger market for a policy that is both affordable and suitable for you. They’ll also give you advice on the next actions you should take, which may include recommending that you wait a few months and apply later.

Is there a way to get past the life insurance denial?

You have the opportunity to appeal if your denial was based on erroneous or insufficient medical information. The simplest method to do this is to request that your doctor furnish the insurance company with as much current information as possible from your medical file.

Non-medical reasons, such as an out-of-date financial record, a lapsed driving violation, or inaccurate information about your employment and interests that put you in the high-risk category, can all be appealed.

What can I do if my life insurance is denied?

When you learn that your application has been rejected, the first thing you should do is figure out why. For more information, contact the insurance company. Knowing why can help you make better decisions when applying for life insurance in the future.

Pre-existing conditions, lifestyle characteristics (i.e. high-risk jobs, participation in extreme sports), age, and a criminal or driving record are also common grounds for applications being denied. Medical examinations may reveal significant conditions that the applicant is unaware of. Confirm the results of your medical exams with your doctor.

It’s possible that you’ll make a mistake, so make sure all of the information you give the insurer is accurate and up to date. Applicants can double-check their information with the insurance company or the MIB. MIB Group (previously the Medical Information Bureau) is a member-owned, not-for-profit corporation that operates in the United States and Canada. It was founded in 1902. MIB’s services are aimed to safeguard applicants, policyholders, and insurers from omissions or misrepresentations on life, health, disability income, critical illness, and long-term care insurance applications. 1 Individuals can request a free copy of their MIB Underwriting Services Consumer File (if one exists) from MIB once a year.

How long do you have to wait to reapply for life insurance?

While reconsideration and reapplication may help you lower your life insurance prices in the long run, they are long-term remedies that may not help you achieve lower life insurance rates right now.

You may, understandably, require lower life insurance rates right now. Before you sign your life insurance policy, there are a few actions you may do to reduce the amount of money you spend on premium payments:

You can lower the face value of the policy

In general, the lower the amount of life insurance coverage you have, the lower your rates will be. If you apply for a $500,000 policy and your premiums are too high, talk to your agent about lowering the death benefit to lower your rates.

You will still pay more for that quantity of coverage than other healthy people your age, but you will be able to secure a lower premium rate.

You can lower the policy term length

One option to reduce the premium cost is to change the term. Changing a 30-year term insurance policy to a 20-year term insurance policy will save you a lot of money on premiums. Again, your agent can assist you in determining the appropriate term duration.

You can opt to pay your premiums annually

When you pay your life insurance premiums annually rather than monthly, you can save up to 8% on the amount you spend.

Whatever you choose, having any coverage is preferable to having none, so the key is to find a sweet spot with the most coverage and the longest term at a price you can afford. Your insurance agent can assist you in determining the best policy value and term for you.

After you’ve finalized your policy and obtained life insurance, you can work to improve your health and reapply for a new policy one to two years later.

What are 3 reasons you may be denied from having life insurance?

When you obtain a life insurance policy, there’s a potential that your beneficiary’s claim will be refused, and it’s critical that you understand why.

If a carrier believes that you have broken the terms of your insurance, it may refund your premiums to your estate and pay nothing to your beneficiaries.

1. The death occurred during the time of contestability.

According to Glenn Kantor, a life insurance attorney in San Diego, policies include contestability periods that normally last two years after purchase.

If you die within the contestability period, which is usually two years from the date you bought your policy, your insurer might look into whether you filled out your life insurance application correctly.

Even if the cause of death had nothing to do with the deception, the carrier may refuse to pay the death benefit if you misrepresented on your application.

If you misled about a medical condition and then died in an automobile accident unrelated to that condition, your insurer may nonetheless refuse to pay the death benefit.

A slight omission, such as failing to record that you’ve seen a doctor in the previous year, is unlikely to result in a denial.

Such misrepresentations usually do not preclude benefits from being paid if you survive the contestability period.

According to Steven Weisbart, chief economist for the nonprofit Insurance Information Institute, if an insurer believes a policy was obtained in order to murder the insured and collect the benefit, the claim will be denied, even if the contestability time has past.

A Florida man was found guilty in April 2014 of killing his newlywed wife in order to collect on her $1 million life insurance policy.

Surprisingly, Weisbart argues, plans to collect life insurance payouts by murdering the insured are not uncommon.

2. The policy did not cover the type of death.

According to Weisbart, life insurance used to utilize a range of exclusions based on the cause of death.

Insurers will often refuse to pay a claim if the insured dies while participating in a dangerous pastime such as skydiving or scuba diving. A common exclusion was dying in a war.

That, according to Weisbart, is no longer the case. Suicide is the only life insurance policy exclusion that is still routinely utilized today. Even the suicide exclusion, he adds, is often waived if the death happened after the contestability period.

3. You failed to disclose personal information that was relevant.

According to Kantor, the most prevalent reason for life insurance denial is failure to divulge information necessary to appropriately calculate the risk of a policy payout.

“If you asked for coverage and didn’t answer the questions honestly,” Kantor argues, “that’s grounds for them to refuse your claim.”

According to Kantor, not all wrong information, such as an incorrect address or driver’s license number, is grounds for refusal. These would be deemed mistakes rather than deliberate misrepresentations.

If you fail to reveal convictions for driving while intoxicated, you may be denied, but only if the conviction is uncovered during the contestability period. Weisbart notes that once the contestability period is up, these convictions are usually not utilized to dismiss the claim.

Even if they’re discovered after the contestability period has finished, some misrepresentations of facts are grounds for refusing or decreasing a death benefit, according to Weisbart.

For example, if the insurer discovers that you persuaded a physician to supply misleading information in order to conceal a medical problem, a death benefit claim will be denied.

4. You didn’t pay your insurance premiums on time.

Policyholders are held to the terms of their policies by insurers. You won’t be able to collect on a life insurance coverage if the premium was let to lapse, according to Weisbart.

According to Benjamin Blakeman, a Los Angeles attorney, elderly policyholders frequently have memory issues, which cause them to miss payments, resulting in policy cancellations. A grace period of at least 30 days is usually included in most policies, during which you can pay the premium owing without incurring interest.

According to Weisbart, having your premium payments withdrawn automatically from your bank account is one approach to avoid having your coverage lapse.

Policies having a cash value, such as whole life insurance, frequently feature a clause that allows the carrier to borrow against the policy’s value to pay past-due premiums. However, this only covers the insurance for as long as there is enough cash value left.

According to Brian Ashe, treasurer at Life Happens, if you’re a beneficiary who believes you were wrongfully rejected a life insurance claim, your first action should be to contact the insurer. There is an appeals process for each carrier.

If you can convince your insurer that their judgment was erroneous, Ashe says, the situation may be resolved administratively rather than in court.

Before contesting a claim denial, Kantor advises that you seek expert legal assistance to ensure that you understand your rights.

According to Blakeman, persuading insurers to overturn a judgment is tough. He claims that when an attorney is involved in the issue, carriers take the appeals more seriously.

What percentage of life insurance claims are denied?

What can add to the emotional anguish of a family member’s death? For a select few, it’s the refusal of life insurance payouts that would have helped them bridge the financial gap left by the loss of a loved one.

Almost all life insurance claims are paid out as predicted. Fewer than one out of every 200 claims is denied, according to the American Council of Life Insurers (ACLI). However, beneficiaries who do not collect on insurance may find this comforting, especially since death benefit settlements are often all-or-nothing deals. According to Juan Carlos Cruz, founder of the Brooklyn-based Britewater Financial Group, when a claim is refused, the full amount is usually not paid out. “There is no such thing as a partial payment.”

Here’s everything you need to know about life insurance claim denials, including what you or your loved ones can do right now to reduce the chances of ever receiving one.

How do I write an appeal letter for life insurance denial?

Making a claim with your insurance carrier might be daunting. However, if you stay organized, it won’t be! A clear, succinct letter describing your counter-argument that addresses the original cause for denial and cites the rules of your policy is one of the most critical components of your appeal packet. The letter might be sent to you or written on your behalf by an advocate or medical provider.

  • The date on which the rejection letter was sent, the specifics of what was refused, and the rationale for the refusal were all included.

Include a thorough explanation of why the plan should cover the claim:

  • Explain why you require the medical care that has been prescribed to you and why you believe your insurance policy covers the therapy or service. Wherever feasible, cite plan linage.
  • Request a letter of medical necessity from your doctor, detailing previous treatments and why the treatment in question was recommended and is necessary for your situation.
  • Provide and reference published journal papers or treatment guidelines from a well-known industry group or institution, demonstrating therapy success and outcome advantages.
  • Anything else that backs up your request, such as copies of pre-authorizations, second views, and so on.
  • Keep track of your submissions. Keep the confirmation of successful transmission if you sent it via fax. Send the letter certified mail with a request for a return receipt if it’s being sent by mail.
  • Keep a copy of the letter, any submitted materials, the delivery or submission receipt, and your record of all correspondence in a safe and orderly location prior to and after submitting your appeal.
  • Within 7-10 days, you should receive an official notification that your appeal has been received. If you don’t hear back, check with your insurance carrier to see if your appeal was received and recorded in their system.

What reasons will life insurance not pay?

If you lie about any risky activities, medical illnesses, travel plans, or your family’s health history on your insurance application, the insurance company may refuse to pay out the death benefit. The best approach to avoid surprises later is to be as honest and comprehensive as possible during the underwriting process.

Risky hobbies

Depending on the conditions of your policy, your insurer may refuse to pay the death benefit if you die while participating in a dangerous activity you routinely enjoy (such as flying a private plane, bungee jumping, or scuba diving).

If your pastime is dangerous enough, your insurer may include an exclusion to your policy that prevents payment if you die while participating in that dangerous activity. This exclusion will be disclosed to you before you sign the policy (there are no hidden exclusions). Amateur pilots, for example, may require an aviation exclusion rider in order to be covered by life insurance. Their beneficiaries will not receive the death benefit if they die in a plane crash.


Because of the slayer rule, if your beneficiary murders you, they will not receive the death benefit. The slayer rule prohibits the payment of a death benefit to someone who has murdered — or is directly linked to the murder — the insured. In this case, the insurance company will instead pay your prospective beneficiaries or your estate the death benefit.

Deaths that happen when you’re doing something illegal are usually not covered by insurance. Most policies will not cover death that occurs while performing a crime, for example.


Suicide is usually covered by life insurance, with one exception: life insurance contracts have a suicide clause that prevents payouts for suicide deaths in the first two years of coverage.

Suicide clauses are in place at insurance firms so that applicants cannot commit suicide shortly after their life insurance policy expires.

What can be the reasons for rejection of a death claim?

The insurance industry is built on the foundations of trust and full disclosure. Even if it seems insignificant, concealing facts might result in a claim being rejected. When filling out an application for a term insurance plan, for example, people frequently conceal their smoking and drinking habits. It may lower your insurance rate, but when your family needs it the most, your claim will be refused. Even omitting facts like age, height, and weight can cause problems later. When insurance is purchased through an intermediary, agents or bank executives fill out the application and may inadvertently input incorrect information due to a lack of cross-checking. Some people even claim an overstated salary in order to receive a bigger amount of guaranteed benefits. To spare your family from unneeded problems, it is critical to be honest and alert when filling out the application form.

Purchasing a decent life insurance policy is only the beginning; you must also ensure that the premiums are paid on time. Only timely premium payments keep a life insurance coverage operational. If you don’t pay your premiums on time, your policy may lapse, and an insurer may refuse to pay a claim under a lapsed policy. When consumers mistakenly fail to pay their premiums on time, insurers usually notify them through email or text message. Insurance companies typically provide a grace period of 30 days. When a policy lapses, all of the premiums paid are lost, and there is no way to get it back.

The policyholder’s nominee receives all of the insurance coverage’s benefits. An insurance company can deny a claim if the nominee information is incomplete or outdated. When people are young, they often purchase life insurance and name their parents as nominees. They forget to update nominee information as they get older, and if the parents are not present when the claim is filed, it will be denied. Keep your nominee information up to current and pay attention to any correspondence from the insurer to avoid rejection.

Companies include a contestability clause in life insurance policies while selling them. It means that if a death occurs soon after purchasing a coverage, the claim may be denied. The contestability period begins as soon as an insurance is purchased. The contestability period for insurers is one to two years. If a death occurs during that time, insurance companies may get suspicious and initiate an investigation. Suicide allegations are dismissed despite the fact that death comes without notice.

Insurance companies, like the contestability clause, maintain a common exclusion list of deaths to reduce losses. Life insurance does not cover all forms of deaths. If the policyholder was involved in dangerous activities or died of a pre-existing ailment, his or her life insurance claim will be denied. Insurers scrutinize the cause of death in great detail. Natural disasters, terrorist attacks, and homicides are not usually covered by insurance policies.

Insurance companies provide adequate time for filing a claim. Although claims are rarely rejected as a result of late filing these days, it is possible if the delay is excessive. Insurance companies have been told not to reject claims due to delays by India’s Insurance Regulatory and Development Authority. Family members of policyholders, on the other hand, should file the claim as soon as possible. Insurers may not outright reject a late claim, but they may take a long time to pay it.

Insurance is a dangerous business, and insurers rely on good risk assessment to mitigate the risk. To acquire a thorough picture of the risk, insurers double-check every medical data provided by an applicant. Medical testing are performed by most firms, especially in cases of high age or high-risk coverage. If you refuse to do the tests, your claim will almost certainly be denied by the insurer due to a pre-existing condition. It is usually a good idea to get medical exams since if you get a test, all pre-existing disorders are covered.

Can you be denied life insurance for anxiety?

When you apply for life insurance, your rates are determined by your whole medical history, which includes mental health disorders such as depression and anxiety.

However, if you have clinical anxiety or depression, you are unlikely to be denied life insurance coverage. Some insurance may charge you more, while others may offer you their most cheap prices. It will depend on how you manage your mental health and the severity of your diagnosis, just like any other health problem.

Here’s how depression and anxiety affect life insurance premiums and applications, as well as how to get the perfect coverage for you.

Do I get money back if I cancel my life insurance?

If I cancel my life insurance coverage, do I get my money back? If you cancel term life insurance during the free look period or in the middle of the billing cycle, you will not receive a refund. If you cancel a whole life policy, you may receive some money from the cash value, but any profits are taxed as income.