Healthy and turned down for life insurance? Here's what to do

It's possible that you could be in good health and yet be told by your life insurance company that your life insurance application has been turned down or put on hold pending further review. How could this be?

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Underwriters at the insurance company assess your application based on your health status, your family medical history and the results of your life insurance medical exam. If you receive a surprise declination of your policy, don't panic, and don't assume you are uninsurable.

If you're in good health and declined, it's likely that something popped up in the lab results that couldn't be explained.

There are also mitigating factors that may have contributed to a declined application, notes Gary Dworkin, chairman of the National Association of Independent Life Brokerage Agencies (NAILBA).

"Underwriters are always concerned with mortality risks when it comes to life insurance," says Dworkin. "Generally, an application is declined based on circumstances that are health-related, but a number of other factors can knock you out of the running."

Dworkin says that those reasons may include travel for work in unstable parts of the world, which has the potential put them at risk. In addition, involvement in "hazardous avocations" or dangerous sports and recreational activities such as scuba diving or skydiving can result in a denial.

Underwriters are cautious people: When they see something worrisome that isn't explained, they won't risk approving your application.

If necessary, there are brokers who specialize in finding life insurance for applicants with medical conditions and other red flags. These "impaired-risk specialists" know which insurers are likely to approve applications for folks with a variety of "insurability" problems, such as smokers, the overweight and those with a cardiac history. For more, read how impaired-risk specialists find life insurance for people with medical problems.

"Some insurance companies don't have an appetite for people who rock climb or work in a hazardous field and do not want that kind of business," says Ryan Pinney, brokerage director and life impaired risk specialist at Pinney Insurance Center Inc. in Roseville, Calif.

Pinney says that people in good health can be declined based on a history of bad habits such as drug use, multiple speeding tickets or DUIs.

"It all goes back to insurance companies being willing to put out a large amount of money on their side when they issue you a policy, and a very small amount of premium on your side, so they are very aggressive about underwriting you," he says.

But that doesn't mean it's the end of your application or that you have to apply somewhere else. Life insurance applications are a two-way street.

How to proceed

Your first step is to find out the reason for your application's declination or postponement. Contact the life insurance company to ask for the specific details of its decision; by law it must reveal this. It may be able to send results directly to you, or it may send the results to your physician. Then, contact your physician to go over the results. If there was a false positive or something abnormal that wasn't explained in the application, your doctor can provide further information to the underwriter.

It's possible that a life insurance medical exam could uncover a serious condition you didn't know about, but it's more likely that an abnormal but innocuous test result was the culprit. Providing the life insurer with evidence, such as other test results, that you are healthy is your best strategy.

In any case, you'll want to get the issue cleared up in case you make future applications. That's because life insurance exam results go into a massive database maintained by MIB Group.

Every time you apply for an individually underwritten life, health or disability policy, your application answers and life insurance exam results, if applicable, are checked against previous application information in MIB's database. (This does not apply to group health, group life or disability policies.) This helps insurance companies detect fraud — such as someone who lies about their health on an application.

You don't want an incorrect lab result recorded in your MIB record.

But you don't want an incorrect lab result recorded (for seven years) in your MIB record. You can request your own MIB record and dispute incorrect information in it through MIB.

If the lab results have uncovered a real medical condition, you have some decisions. The declination will be on your record and will act as a red flag for any future life insurance applications. You'll want to be able to demonstrate, if possible, that your condition is controlled and does not affect your general health or life expectancy. The more medical evidence you can show to support this, the better.

Pinney suggests a few things you can do to increase your odds of application approval based on the outcome of the medical exam.

"They will do a blood draw and urine analysis, so make sure you are properly hydrated," he says. "No stimulants or alcohol a couple days before the exam, and realize that some medications will affect your results. Motrin and Tylenol elevate liver function temporarily, so you should avoid taking these medications before the exam. Keep in mind that the insurance company only has a snapshot of your health to make a decision about you."

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