LIFE INSURANCE - 6 Reasons of Policy Denial by Companies

BY: DIGITAL MEDIA MARKETING | MB Enterprises

This article lists down the top 6 reasons why life insurance is not acceptable by a life insurance group. These reasons includes health issues, participation in high-risk activities, specific financial reasons, filed for bankruptcy, DUI, and having a criminal record.

The life insurance is normally declined by an insurance company because of health issues. As an example if someone is at high-risk of life and suffering from a disease like Cancer. Hence, ironically the Life insurance company risks are increased and that’s another reason why companies don’t think it’s worthwhile.

For this particular reason i.e. involvement of high risk the person might have applied with the wrong company.

The best solution is to have a high-risk life insurance agent who can provide with an insurance company that is willing to give an insurance on such a high risk to life. However, this is possible as companies are willing to move forward with those who can give an insurance on health risks.

Participation in high risk activities is a huge reason why companies deny life insurance. As an example a simple case is that while most companies insure scuba divers. This depends on the type of diving that you do i.e. (open water vs cave diving). The other factors that some insurance companies will not insure you if you are a scuba diver are as follows; the amount of time you dive a year, how deep you dive & where you dive.

Other set of people are actively deployed military personnel who had a hard time getting approved. This cannot be possible unless you have worked with specific insurance companies.

The need for financial justifications is a big financial reason for a decline in life insurance by a company. In simple words there is an intense need for financial justifications that a client must provide in order to move forward. The insurance companies makes sure that the client is financially not weak and have all the reasons to apply for a life insurance policy i.e. highly justified.

The qualification for the client also depends on the earnings per annum. As an example we can say that somebody who has an annual earnings of $25,000 per annum would most likely not qualify for $1,000, 000 life insurance policy. These are calculations for the Insurance companies and insurance companies know how much a client can qualify for keeping in mind their earnings. Earnings play a huge part as they mean financial security for the client.

If a client has filed bankruptcy due to a loan or they can’t pay a mortgage payment, in this case the financial circumstances are overlooked by companies. Usually there are a huge amount of companies that will deny the life insurance policy straight away due to bankruptcy being filed. Here the risks are high and high risks means less financial security. The word ‘Financial Security’ is the key for finding a solution that is good enough for Insurance companies.

5. ISSUES ASSOCIATED WITH DUI (DRIVER UNDER THE INFLUENCE):

Having a DUI i.e. driving under the influence is a negative record and hence can have a negative impact on the life insurance policy of the client. Having more than three DUIs in the last 10 years, every insurance company would decline your life insurance policy. Having at least 1 or 2 DUI’s in the last 10 years means some insurance companies will decline you while others will not.

Having applied with DUI it is most possible that the client has probably applied with the wrong insurance company.

If you are someone who is a drug abuser or alcohol abuser, this is most likely that you will be declined. The most prominent reason for this are the risks associated, and these risks are risk of an accidental death. On a conditional basis some companies can give the client an insurance offer. This is only if the client has stopped drug abuse since last 3 years and no abuse of alcohol since the last 2 years.

To have a life insurance policy it is important to have a clear CRB i.e. Clearance from Criminal record bureau. Having a criminal record means that the client can be under life threat. The authority to have a life insurance policy is not safe and finally he is not fit to have a good character reference check that is a necessity.

However, there are conditions which means when was the client last convicted, when did his conviction expired, and finally how many convictions was he under since last 2 years. Based on these checks the client might get an insurance coverage depending how long ago the probation ended. However, coming in such a category it’s better to work with a high-risk life insurance specialist.

Since MBE Group is a company based in Canada, MBE insurance works according to the Canadian rules. Hence, similar procedures are followed that relate to Life Insurance and its risks.

MBE Insurance also makes sure that their prospective clients are worthy enough according to the risk assessment procedures.