What to do if you've been denied life insurance

It's never fun to be rejected — but if you've been turned down for life insurance, you can take comfort in knowing you aren't the only one.

Even if your life insurance application has been denied, you still have options. Read on to understand why you might have been rejected and what your next steps should be.

Why was my life insurance application denied?

When you apply for life insurance, providers weigh a variety of factors, from your age and health to your family history and hobbies. They want to find how risky it would be to insure you. Each company calculates risk differently, and each is willing to accept different levels of risk.

Reasons to be denied life insurance

Life insurance companies can reject applications for one or a combination of reasons. Some examples of things that life insurance underwriters consider are:

• Health issues — Many health problems fall into a high-risk category like diabetes, high blood pressure, obesity, chronic illness or an earlier health condition, such as cancer. If you can show that your illness is being treated, it may help your application.
• Lifestyle — Even if your policy isn't rejected outright, you may pay more for coverage because of a risky job like roofing, a criminal record or even a dangerous hobby.
• Driving Record — Safe driving not only helps with your auto insurance rate, but it can also increase your likelihood of qualifying for life insurance and help in keeping your premiums rates acceptable.
• Tobacco use — Smokers often pay at least twice as much for life insurance as nonsmokers. “Smoking” includes use of e-cigarettes, vape pens, cigarettes, cigars, pipes and chewing tobacco. To qualify as a nonsmoker, most insurance companies require you to be nicotine-free for at least one year. Keep in mind, insurers usually count nicotine patches and gum use as smoking, but you might get a discount on your premium for using nicotine replacement products. Combining tobacco use with other risks may be cause for decline in coverage.
• Inaccuracies or omissions — Your life insurance premium is based on a correct application. If you intentionally leave out information or if the life insurance company discovers misinformation, your application might be denied.

Next steps if your insurance application was denied

You can sometimes find life insurance coverage even if your first application was denied. Take the following steps to better understand your options.

1. Talk to an insurance professional — A licensed life insurance professional may have more success than you would working on your own. Some work with many different insurance companies, so they can help you find the best fit. Some specialize in helping high-risk people get insurance.
2. Try a different insurer — Life insurance companies have unique criteria for evaluating insurance applications. If one rejects you, you may have success with another.
3. Look into an employer-provided plan — Research if your employer offers group life insurance. Ideally, you may want a higher death benefit, but some coverage is better than no coverage. Keep in mind that you may lose this policy if you leave your employer.
4. Wait and apply later — Take some time to get any health conditions under control, quit smoking and improve your lifestyle choices. If an insurer sees that you're making changes and taking care of yourself, you may be more likely to get a policy.

Instant issue life insurance

Many insurance companies are starting to accelerate their underwriting process by offering a type of “instant issue” life insurance with the goal of simplifying the application process to get you approved for coverage in a matter of minutes.

Being declined for instant issue coverage doesn’t always mean you’re declined for coverage. Sometimes it just means you’ve been declined the opportunity to have an instant approval decision.

In many of these cases, your application will go from accelerated underwriting to a traditional underwriting process with requirements like a medical questionnaire and medical exam. This means you still may qualify for competitive coverage and rates with the company you wanted.

Should I consider a different policy type?

The most conventional form of life insurance is term life insurance. But it is not the only policy type. If you were considered too high-risk for term, you have other options.

You could try a no medical exam life insurance policy. Usually, this requires a quick online application. While a medical exam typically isn’t needed, you may have to answer a few health questions.

No medical exam policies have strict policies for approval and often provide a short waiting period for coverage. The downsides may include low coverage limits and higher premiums.

Another choice that lets you skip both the medical exam and the health questionnaire is guaranteed issue life insurance. Coverage is guaranteed for anyone who applies, but there's often a waiting period before full benefits are paid out to your beneficiaries. These policies also tend to have limited coverage and high premiums.

No matter where you are in the process, a qualified life insurance professional can help you figure out the right policy for your needs. If you’ve been declined, talk with a life insurance professional. They may help you explore options you didn’t know you had.