Reasons Why You Were Denied Life Insurance In Canada
Denials can happen at different times in life, but they are often easier to deal with if you get help and advice.
It can be hard to find your way around the many life insurance policies out there, especially since each one is designed to meet a different set of needs. If an insurance company turns you down for a policy, it means that the policy or company you chose might not have met all of your needs.
It can be helpful and informative to know the common reasons why you were denied life insurance in Canada.
The process of getting life insurance
Before you get a policy, you have to go through several steps to get life insurance. Every life insurance company has its own rules and processes, so keep that in mind. Because of this, the application process is a little different for each insurer, with different questions and details needed.
The general process stays the same, though: you send in your application along with the required information, and both the insurer and the company will look it over. Following this review, you will be given a final choice.
Process of getting Life Insurance
- Submission of Required Information: Begin by providing all the necessary details as asked by the insurance company.
- Underwriting Review: Your information is sent to the underwriting department, where it gets a thorough examination.
- Decision Announcement: You’ll receive a decision from the insurance company regarding your eligibility for a policy.
The underwriting process analyses your risk profile, determining both your insurability and the premium you’ll pay. This evaluation is crucial as it not only decides whether you apply for a policy but also influences the monthly premium amount.
It’s necessary to remember that each insurance company offers a range of products and policy types, each with varying requirements for the information needed from applicants.
For instance, traditional life insurance policies typically necessitate a medical exam, whereas non-medical policies like simplified issue or guaranteed issue life insurance may not require a physical exam but might ask other health-related inquiries.
Are you ready to start your journey towards getting life insurance? Let Sure Insurance help you through the process.
What to consider when applying for life insurance
When you apply for life insurance, numerous factors come into play that can impact your premiums and eventually, whether you’re approved or denied coverage. These factors encompass:
- Age: Younger individuals usually face lower premiums due to a perceived lower mortality risk.
- Gender: Statistically, women tend to live longer than men, affecting premium estimates.
- Profession: Certain occupations carry higher risks, affecting insurance rates.
- Hobbies: Risky hobbies can raise your premium.
- Driving Record: history of traffic violations or crashes can affect approval.
- Criminal Record: Past convictions can impact your candidacy.
- Pre-existing Health Conditions: Existing health problems are carefully assessed.
These factors assess the likelihood of your untimely demise or during the policy term. Higher risk profiles often lead to denial of standard life insurance or significantly higher premiums.
Life insurance companies employ individual underwriting standards, meaning one company’s denial doesn’t immediately translate to another’s approval. For instance, a company might reject an applicant due to a specific health condition like asthma, while another might accept the application but change the premium accordingly to offset the associated risk.
6 reasons you were denied getting a life insurance policy
Life insurance companies are businesses, so it is common for them to reject your application if they think you are too risky to insure. If you are looking for traditional life insurance, the most common reasons why you were denied life insurance in Canada is underlying health conditions.
When you apply to a life insurance business, each has its own underwriting guidelines. For example, one company might deny you for simply mentioning diabetes, while another might issue you a policy.
Some reasons why you were denied life insurance in Canada:
- Age
- Underlying or pre-existing health issues
- Your lifestyle, including your work and hobbies
- Your crime or driving record
- Financial problems
- Not providing the right documentation
- Lab results
- Driving record
- Foreign travel
1. Age
There are age limits on every type of life insurance, although they may differ based on the company. Generally, once you are over 65, the choices for life insurance policies decrease as you age.
For instance, if you are 75 and apply for a 20-year term life insurance policy with a company that has a limit of 70 for term insurance, your request would be rejected due to your age. Although it may be difficult, seniors can still find life insurance choices.
2. Underlying or Pre-existing Medical Conditions
Life insurance companies often reject policies if you have health conditions like asthma, cancer, diabetes, or heart and lung issues.
No matter your health problems, it is possible to get life insurance. Traditional and simplified life insurance require medical information, but guaranteed or no medical life insurance do not ask for medical tests or questions.
3. Lifestyle (High-risk Professions, Participation in Extreme Sports)
Your job and hobbies can affect your life insurance approval. High-risk jobs and extreme sports raise your risk profile.
- Examples of high-risk jobs include:
- Race car drivers
- Pilots
- Roofers
- Examples of high-risk hobbies include:
- Rock and mountain climbing
- Snow sports
- Scuba diving and skydiving
Depending on your job and hobbies, this can increase your premium or lead to rejection. Also, coverage might not be given if death results from these activities.
4. Criminal or Driving Record
A criminal or bad driving record can indicate to underwriters that you are high risk, leading to denial. This shows a higher chance of premature death due to risky behaviour.
While this does not make obtaining life insurance impossible, it may require looking for insurers ready to work with such backgrounds.
5. Financial Issues
You cannot get more coverage than your life is worth, as this would make you worth more dead than alive, offering a risk to you and the insurer.
If an insurance company thinks you cannot afford the premiums, they may deny coverage. In this case, you can ask what information is needed to apply or seek another insurer.
6. Not Providing Required Documentation
Not providing necessary documents, like a doctorâs note or identification, can lead to denial. Documents might be considered invalid if they are wrong, illegible, or mismatched with your application.
Ensure all submitted papers are clear and accurate to avoid delays or denials.
If you are unsure why you were denied, the first step to saving time and avoiding more denials is to ask the company why your application was refused.
Get a quote from Sure Insurance today to secure your peace of mind.
7. Lab results
You could be required to go through a medical examination to prove your excellent health as part of the underwriting procedure. Advanced underwriting algorithms have made medical exams less common, but if you have a medical issue, the insurance company may still require one.
How successfully you are managing a chronic condition will be shown by the test findings’ blood pressure measurement, blood sample, and urine sample.
You won’t have to worry about any additional costs because the life insurance company will cover the expense of the medical examinations.
8. Driving record
You will be asked whether you have had any recent moving infractions, license suspensions, or DUIs on the life insurance application. Your chances of getting denied for life insurance are increased the more of them you’ve had.
9. Foreign travel
You are required to complete a foreign travel questionnaire if you indicate that you have visited or plan to visit a high-risk nation in the upcoming year. It inquires about the nations you want to visit, as well as the length, frequency, and reason for your travels.
Are you planning a trip to any of the nations advised against travel on the Canadian government’s website? Be ready for your coverage to be refused.
What to Do If Your Life Insurance Application is Declined
If your life insurance application was rejected, it might be because you didnât apply to the right company or policy type for your needs and situation.
There are steps you can take to help you find the right life insurance for you, starting with finding out why you were rejected, understanding your options, possibly speaking with a life insurance expert to create the perfect plan, and finally applying to the right company.
Find Out Why You Were Denied Life Insurance
This is important. The reason you were rejected might be due to a mistake or misunderstanding. If not, understanding the reason helps you understand why that company and policy type are not suitable for you.
Work with an Insurance Advisor to Understand Your Options
After knowing why you were refused, you still need to find a policy within your budget. This is where a counsellor can be extremely helpful. At Sure Insurance, our life insurance experts help you find the best policy at no extra cost.
We compare quotes from various companies, unlike specific life insurance companies that only provide their quotes. By working with a life insurance advisor, you can explain why you were denied, and they can suggest options based on your needs and the reason for denial.
If you prefer not to work with an advisor, youâll need to study life insurance companies, their coverages, and guidelines to find the right policy for you.
Apply to Traditional, Simplified, or Guaranteed Life Insurance
If traditional life insurance doesnât work despite your efforts, a no-medical policy such as a simplified issue or guaranteed life insurance might be your answer. No medical life insurance has fewer requirements and is more open to people considered medium to high risk, though it has higher rates.
Reasons a life insurance claim was denied
If you were trying to claim life insurance for a loved one and were denied, it means the contract for the death benefit was not fulfilled properly. This is usually due to the cause of death not being covered by the policy or not providing the proper documents.
Note that most life insurance plans will not pay a death benefit if the insured:
- Passed away by suicide
- Failed to reveal a medical condition before the policy started
- Passed away due to drinking or drug use
- Passed away while performing a criminal act
Life Insurance Options
You might wonder what choices you have after being denied. The answer is, that you still have plenty!
Traditional (Fully Underwritten) Life Insurance
If you were rejected when applying for life insurance, it was likely traditional life insurance. People apply for traditional life insurance first because it has the cheapest rates. Traditional life insurance includes term life insurance and permanent life insurance.
Permanent life insurance, also known as whole life insurance, lasts your whole life, while term life insurance lasts for a specific time, such as 10, 15, 20, 25, or 30 years.
Traditional life insurance asks about your medical history and needs a medical examination. This examination helps the company assess your risk based on your health conditions, family medical history, and general health.
Simplified Life Insurance
Simplified life insurance is a great choice if you are denied traditional life insurance. It only asks a few medical questions and doesnât require a medical test, making underwriting more open to certain health conditions and lifestyles. Simplified life insurance is easier and faster to receive, though it has slightly higher premiums.
Guaranteed Issue Insurance
If you are denied both traditional and simplified life insurance, guaranteed issue life insurance is a good choice. Guaranteed life insurance needs no medical questions or exams, so those with health conditions will not be denied for health-related issues. This should be the last option due to its high cost and limited coverage.
Get a quote from Sure Insurance today to secure your peace of mind.
Frequently Asked Questions
What life insurance options do I have if Iâve been denied?
Understanding why you were denied is crucial in determining which policies you are qualified for and will be approved for. If a life insurance company denies your application, you likely asked for traditional life insurance. However, you still have many choices, such as simplified life insurance and guaranteed or no medical life insurance.
If you need assistance finding a life insurance policy, whether you have been rejected before or not, book a free 15-minute consultation with a life insurance advisor or contact us to help you find the coverage you need.
What is high risk and why am I considered high risk?
In the underwriting process of a life insurance policy, “risk” refers to the chance of you passing away by or before a certain age. If you are considered high-risk, it means the life insurance company thinks that, based on the information you provided, you are at a higher risk of dying early or by a certain age.
Reasons you might be considered high risk include your age, health conditions, hobbies, job, criminal record, or driving history.
Why do I keep getting denied life insurance?
Life insurance companies may reject your application for several reasons, such as your age, health conditions, hobbies, job, criminal record, or driving history.
It’s important to identify why you are being refused and, based on that information, find the right type of policy, such as simplified or guaranteed insurance. The problem might be that you are applying for the wrong type of life insurance. A life insurance advisor can help you explore your choices.
What can make you uninsurable for life insurance?
Being uninsurable refers to the reasons a life insurance company might not give you coverage. Factors include your age, pre-existing health conditions, hobbies, job, criminal record, dangerous driving record, personal financial situation, and more.
Get a quote from Sure Insurance today to secure your peace of mind.
