Being deemed uninsurable can be frustrating when your family’s financial security is at stake. In the scenario that you’re declined for coverage there are a few things you should consider. While your options may be limited, the “something is better than nothing approach” is not the only one to take here.
In summary here a few points you want to consider when labeled uninsurable for life insurance
- Make sure that you’re actually uninsurable. Just because you’ve been declined with one company doesn’t mean that that will be consistent throughout all of them.(Let us do this part for you).
- Consider coverage through your employer. Life insurance through work benefits those that are uninsurable because they’re able to attain coverage with no questions asked by pooling all the employees together.
- Consider Guaranteed Issue life insurance coverage. There are many drawbacks to this type of policy but if all other options have been exhausted, this may be the only option left.
- Work with professionals. You want to work with either an independent life insurance agent or a financial planner to help you allocate your money to protect the future income of your family.
Your absolute best option is to give us a call and let us work for you. We can assess your situation and let you know which steps are necessary to take next. We often work with high risk clients and have been able to get traditional coverage for those that have been told that they are uninsurable by agents they worked with. Other than that let’s dive into the aforementioned points in detail.
Making Sure You’re Uninsurable
Being declined for life insurance doesn’t always equate to being uninsurable. There are a few reasons that you may have been declined.
The first is the type of policy you applied for. Some life insurance companies offer simplified issue no medical exam plans. These type of no exam plans skip the exam but actually have a much more strict underwriting process than traditional policies. So if they see something in your medical records they don’t like, they may decline you.
Another reason you may be declined is the company you went with. Most companies view certain risks differently. It becomes highly likely that the company your agent applied with didn’t look favorably on the type of risk that you posed to the specific company. For example, many companies will declined type 1 diabetes patients, while others will be willing to provide coverage. So make sure you’re working with an agency that has experience with high risk cases(Hint:That’s us).
Considering Group Life Insurance
If you find that you are indeed uninsurable group life insurance may not be a bad option. While it has it’s drawbacks, it isn’t all bad for people with medical conditions because coverage is guaranteed. Most employers will provide you with up to 3 times your salary at no extra cost and you can pay the additional premium for any coverage you want on top.
The huge upside is that you don’t have to take a medical exam or go through underwriting. So you do have the income replacement protection that your family needs in the case of your passing.
The downside is that it may not be transferable. Make sure you read the paperwork and double check if you can take your coverage with you if you’re thinking of leaving. The other downside is that normally your rates will increase every 5 years when your employer renews the life insurance contract with the company. However, that is a very small price to pay to have adequate coverage when uninsurable.
Looking at Guaranteed Issue Coverage
In the scenario that you can’t get coverage with any company or through your employer you may want to consider a guaranteed issue policy. This product has guaranteed approval with no medical exam and no health questions.
The catch is that the product has a limited coverage cap of $10,000 to $25,000 depending on the company. The other catch is that it is much more expensive than any traditional coverage for that amount. The third catch is that there is no death benefit payout in the first two years. However, what’s important to consider is that it’s better to at least have coverage that can cover you final expenses, rather than no coverage at all. This where the “something is better than nothing” mentality can apply.
Working With Professionals
Life insurance and personal finances can be a difficult process to navigate through so it’s important to seek the help of professionals(I don’t use that term loosely).
First you want to make sure you seek an independent agent or agency that has many companies to turn to at their disposal(that’s still us). This way you exhaust all options before turning to less desirable options like guaranteed issue or group life.
A good financial advisor can also help you look at all your finances to determine if a guaranteed issue policy is a better option than reallocating your assets to help secure your family’s financial future.
It’s Something
If you have any questions or want to weigh out your options contact us so we can assist you at 888-492-1967 or chat us below if it’s not too late. Overall it’s best to shop around with multiple carriers and make sure that you actually are uninsurable. Other than that these are a few options that you have when you’re uninsurable for a traditional life insurance policy, it’s not much but…
