Declined Life Insurance

Podcast approved by The Openwork Partnership on 20/12/2024.

What is life insurance?

Life insurance is a way to support you or your loved ones financially if something happens to you. It’s a safety net for their future.

For example, simple life cover pays out when a customer dies or is diagnosed with terminal illness, or whole-of-life plan, sometimes called an adaptable life plan, which is the same as life cover but has no term ending. The main purpose of this one is to cover your funeral expenses.

What are the top reasons why you could be declined life insurance?

You could be declined due to certain health issues, a risky job, dangerous hobbies, family medical history or for lifestyle reasons.

What are the main medical reasons for declined life insurance?

These are usually serious health issues like heart disease, cancer or long-term conditions.

What can you do after you’ve been declined life insurance?

First of all, don’t worry. You could look at other policy types, work with a broker, or try again after improving your health. There are usually options.

Our industry responds quickly to adapt it to the market conditions and clients’ needs. 20 years ago, there was literally no way to get life protection if you had suffered from cancer. Nowadays, there are providers who could offer cover to those clients, usually with some special terms in place.

Does being refused life insurance have any impact on future applications?

Not always. Some insurers may look at past applications, but a previous decline doesn’t mean you can’t get cover later.

Bear in mind, though, if the policy is declined because false information has been given or due to declining health questionnaires, providers could share this information to warn other insurers.

Do I have to pay more for life insurance because I’ve been declined?

Sometimes, yes. If you’re seen as a higher risk, the premium might be a bit higher, but an advisor could help you find the right rates. Sometimes providers could impose special terms, such as temporarily loaded premiums or exclusions.

Does life insurance have an initial exclusion period?

Yes, many policies have a short exclusion period, usually for specific conditions. It’s worth reviewing those details with the provider.

In the past, providers certainly had some initial exclusion periods. As an example, suicide in the first 12 or 24 months is excluded in most policies, but not all of them.

Does life insurance require a credit check?

No, a credit check isn’t typically required for life insurance. The focus is more on your health and lifestyle factors.

If not declined life insurance, would there be any reasons why my premium could change at application?

The most common reasons for this would be your lifestyle, higher BMI, and excessive family medical history. If new health or lifestyle information comes up during underwriting, it could change your premium too.

What kind of life insurance policies should I be looking into?

It depends on your needs. Term life covers a set time, while a whole of life covers entire life. Of course, a broker like myself can help you to choose the right insurance.

What are the differences between simplified issue life insurance, guaranteed issue life insurance and mortgage life insurance?

Simplified issue life insurance offers quick approval with a few health questions. With guaranteed issues there are no health questions, but higher costs. Mortgage life insurance covers the mortgage if something happens to you.

What are the misconceptions or myths about life insurance that you’d like to address?

A typical one is that life insurance is too costly or only for older people – but there are affordable options and starting early could be a good choice.

How can a mortgage and protection broker help? Is there anything else you’d like to add?

A mortgage broker or protection broker like myself could help you find the right insurance to protect your family and your home. So if you have any questions, just ask. I’m here to help.

Approved by The Openwork Partnership on 20/12/2024.