Let’s face it; life doesn’t always give us what we want, but we find ways to cope nonetheless. This same principle applies when it comes to life insurance. When applying for a policy, it’s not a guarantee that the insurer will offer you coverage.
If you have a high-risk job or a severe medical condition, there’s a chance you’ll be denied life insurance coverage. The good news though is, there are many other options to explore if this happens to you.
Here, we take a look at some of the most feasible alternatives to consider in such situations.
Non-Medically Underwritten Life Insurance
If an insurer denied you the usual life insurance coverage due to a pre-existing condition, non-medically underwritten insurance might be the perfect alternative. Under this type of coverage, you won’t need to take any medical examination or deliver a report from your general practitioner.
The only downside is that you will have to dig deeper into your pockets as the premiums are relatively higher. Also, most insurers put limitations on their coverage to prevent massive losses if a risk occurs. What’s more, you must be between over 50 years to qualify for non-medical coverage.
Seeking financial protection against life-threatening risks doesn’t always have to be through third-party insurance. You can create a personalized insurance back-up plan that still serves the same purpose.
So the question is, how do you self-insure?
Our preferred option is opening a taxable investment account and stocking it with the money you would otherwise direct towards paying your life insurance premiums.
For example, you can open a mutual fund account and invest in it for ten years. By the time the funds mature, you shall have saved up a substantial amount, and the best part is, you won’t need to file a claim to access your money.
If you have mortgage debt, consider paying it off in lump sum or for a shorter time to direct the interests to an investment plan.
Seek Assistance from your Employer
Reach out to your employer to check if they offer a group term life insurance that you can sign up for. The only major flip side is that these kinds of plans won’t offer you adequate income coverage, but it’s better than none.
Usually, this will cost you nothing, unless you want to increase the plan’s payout; in that case, you’ll be funding it from your pocket. Another thing to like about workplace insurance is that you’re not subjected to a medical exam. This comes in handy if you have a pre-existing condition.
On the downside, this coverage only exists as long as you have your job; if you quit work, you lose the coverage.
You can also ask if your company grants optional life insurance as part of the benefits package. This is an excellent alternative if non-medically underwritten life insurance is too expensive or has limited coverage.
Like the group plan discussed above, optional life insurance comes at no cost, but you can always choose to upgrade the policy at your expense. As for undergoing medical tests, it depends on the policy’s terms. Likewise, the coverage ends when you leave your job, but you can decide to convert it to an individual plan if this happens.
Talk to your Broker or Agent
Most reputable insurance companies will be courteous enough to send you a letter stating why your application was unsuccessful. If you made the application through a broker, they should receive a note too.
At this point, we recommend you go back to the drawing board and consult an independent life insurance expert. The agent or broker will help you iron out any mistakes you made during the application and remove possible barriers that got your application rejected in the first place.
The other benefit of consulting an expert is that they have plenty of information about carriers with favorable underwriting guidelines. Therefore, they’re better suited to advise you on the steps to follow to get accepted when applying to a different insurance company.
Being denied life insurance coverage should never be the end of the road. You still have the option of going for non-medically underwritten coverage, self-insuring, checking what’s available at your workplace, or consulting an expert.
After all, the end goal is to protect your family and loved ones financially should anything happen to you. If you need further clarification on this issue, please do not hesitate to share it with us. We’re always happy to help.