Have you confidently submitted all of your life insurance paperwork after going through the hassle of blood tests, medical exams and questionnaires, only to be hit with an application denial?
Insurance companies deny applications for many reasons, from pre-existing health concerns through to having a dangerous occupation or a hazardous recreational lifestyle.
However, many people who have their life insurance application rejected are left wondering where they went wrong.
If you’re unsure why you haven’t got the nod of approval, scroll through our list of the 14 most common reasons why insurers deny life insurance applications.
Health Reasons
#1: High Cholesterol, Lipids & Triglycerides
Heart disease kills one Australian every 27 minutes, and one in six Australians will have a stroke in their lifetime, so it should come as no surprise that the high cholesterol levels which can cause these conditions are a red flag for insurers.
If you’re one of the 5.6 million Australians that have unhealthy levels of cholesterol (whether that be unusually high levels of “bad” cholesterol (LDL), low levels of “good” cholesterol (HDL) or both), it will be worth your while to get your levels under control before you apply for life insurance.
#2: High Blood Glucose
If your blood sugar levels are off the chart, don’t be surprised if your life insurance application is rejected. Elevated blood glucose levels are a precursor to type 2 diabetes – a condition that has been described as a “silent pandemic” because it currently affects 1 million Australians.
#3: Hepatitis
If you didn’t know that you’re positive for hepatitis B or C until you had already submitted your life insurance exam, your application will almost certainly be rejected.
This is one of those areas where you’re better off being honest from the start of your application, because if you declare that you have Hepatitis and are either getting treatment, or have been successfully treated in the past, you may still be eligible to get insured.
#4: Positive Alcohol Marker
One of the things insurance companies look for in your blood test is the presence of “carbohydrate deficient transferrin” or CDT. CDT in your blood indicates that you’re a heavy drinker. You won’t get a positive alcohol marker from drinking casually, or even if you have a few drinks on the day of your exam. It will only show up when your liver is stressed from consistently having to process alcohol.
Because excessive alcohol consumption raises both the chance that you’ll engage in life-threatening activities and damages your body when you consume it, getting a positive alcohol marker will result in automatic denial.
If you’re rejected because of a positive alcohol marker, it’s a good idea to stop drinking and find a way to substantiate your sobriety before you apply for life insurance again.
#5: Signs of Elevated Liver Function
Elevated liver function is an easy way to get your application rejected because, similar to the presence of CDT in your blood, it indicates that you are consuming excessive amounts of toxins that your liver cannot handle.
When it comes to your liver, life insurance companies will always assume the worst case scenario: a long term, life threatening condition.
Fortunately, this type of serious condition isn’t always the case and elevated liver function can often be reversed.
It is worthwhile getting your liver function tested before conducting your life insurance exam so that you have a chance to improve your results, and get follow-up medical attention if you do in fact have a serious problem.
#6: Positive Drug Test
If your test results come back positive for drug use, your insurer will definitely knock back your life insurance application. As with alcohol abuse, drug consumption not only affects your physical health but indicates that you’re more likely to get into life-threatening situations while under the influence. It is advisable to establish a period of verifiable sobriety before you attempt to obtain a life insurance policy.
#7: Blood or Protein in Urine Samples
The presence of blood or protein in your urine could mean you are experiencing a serious kidney condition, or it could just be a by-product of an extremely physically active lifestyle.
This is another one of those symptoms you want to identify, find the cause of, and treat before you submit your application.
#8: Being Overweight or Obese
Insurance companies don’t just evaluate your application based on the number of kilograms you weigh. Rather, they use a combination of your height to weight ratio and whether you have any other health risks to assess your eligibility.
Just being overweight usually doesn’t mean you’ll be automatically declined, but it often means you’ll have to pay higher premiums.
#9: History of Cancer
Despite the huge cancer treatment advances that have been made, having previously had cancer may make it hard for you to get life insurance. If you’ve had cancer in the past, your risk profile will largely be determined by the type of cancer you had, what stage it progressed to and how long it has been in remission.
#10: IDS or HIV
These days, many people who have AIDS or are HIV positive not only survive, but live normal lives. However, many companies in the insurance industry still see AIDS and HIV as major risks to your life expectancy.
If you are positive, it’s worthwhile shopping around for a company that has an accommodating policy before you apply.
#11: Mental Illness
Suffering from a mental illness such as depression can affect your ability to get insured. Even if your condition is completely under control and you’re receiving medical treatment or counselling, an insurer that can provide reasonable and relevant information including data to support their decision can deem you too great a risk.
Non-Medical Reasons
#12: Poor Driving History
Car crashes are a leading cause of death for otherwise healthy people. So, if your driving record shows that you have been in multiple accidents, been caught drunk or drug driving, or have had your licence suspended or revoked for other reasons, this can affect your ability to get life insurance. This is especially true for applicants in a higher risk category such as youth or elderly people.
#13: Hazardous Occupation
If your job or working environment is significantly more dangerous than the average occupation, you may find insurance companies very reluctant to give you protection.
Australian life insurers have released a list of the 10 most dangerous (and therefore uninsurable) jobs:
- Commercial fishers: You might think that mining is the most dangerous industry, but adding water to the mix makes fishery 17x more dangerous than its land counterpart.
- Truckers: You’re 10x more likely to die while at work if you are a trucker than if you’re in a regular occupation.
- Farmers: There’s one main reason that farmers find it hard to get life insurance: tractors. Overturned tractors are a leading cause of death for farmers, with machinery accidents not far behind.
- Miners: Workplace hazards such as toxic gases and explosions kill 50-60 Australian miners every year.
- Construction workers: With similar rates of workplace fatalities as mining, construction is considered a high-risk profession.
- Tree loppers: Working with chainsaws, at great heights, and around power lines makes it hard for tree loppers to get insured.
- Defence force: Whether you’re in the army, airforce, navy or police service, you’re routinely subjected to a wide range of risks including disease, assault and injury.
- Firefighters: Both the exposure to fires and accidents, and the stress that this occupation places the human mind and body under make it a profession that’s less than ideal in insurer’s eyes.
- Pilots: The chances of mechanical failure, bad weather, and other hazards aren’t enough to stop most of us flying, but they are enough to make insurers think twice.
- Garbage collectors: The combination of working on the road and being exposed to bacteria, toxins and chemicals on a daily basis makes this a job insurers would prefer not to deal with.
#14: Dangerous Extra-Curricular Activities
You may have noticed that your application involved more than a few questions about what exactly you get up to in your spare time. For some applicants, it’s not their health or work that prevents them from getting life insurance; it’s their penchant for a hazardous lifestyle!
What exactly is a hazardous lifestyle? Participating in activities like skydiving, base jumping, scuba diving, flying planes or other extreme sports in your spare time could deem you a life insurance untouchable.
What to do if You’re Denied
If you’ve been denied, don’t fret! There is a range of ways you can still get life insurance. A few basic tips for getting the tick of approval include:
Research Other Companies
Every insurer uses a different set of guidelines to determine who is a suitable candidate for life insurance. What might be a deal breaker for once company may be perfectly acceptable to another. Take the time to research which companies will be more lenient in the areas you fall short before you apply.
Ask Why You’ve Been Denied
It’s your right to know why you weren’t given life insurance. By finding out why you have been denied and fixing that problem, you’ll give yourself a much better shot at approval the second time around.
Double Check Your Medicals
If you’ve had some surprising medical results returned to you, it is worthwhile getting your own medical practitioner to verify these findings. Mistakes are made, and if you can prove that your initial assessment was not correct, you may still be able to get the policy you wanted.
The bottom line: If you’ve had your life insurance application knocked back, it is either because you’ve got a pre-existing medical condition that you’re better off knowing about anyway, or you’re displaying some work or lifestyle risk factors. There are always steps you can take to make yourself insurable, you just might not be able to get the cheapest cover on the market.