Term Life Insurance Articles
Three Routine Reasons To Be Rejected For Term Life Insurance
2010-07-24
Let's face it, no one likes rejection. It hurts. However, when it relates to term life rejection, the results go beyond emotion. Rejection for life insurance jeopardizes financial security in the event of death, and may put survivors in unfortunate situations. However, like many things, insurance is a business and different companies have different guidelines as to risk. Wise consumers will not hesitate to get many term life insurance quotes. After all, only approximately 3% of all term life applicants are not approved. To help guide consumers, here are three of the most common reasons.
The most common reason for term life rejection is health conditions. Statistically, they indicate a greater likelihood of death. In fact, eighty percent of all rejections are based on chronic medical problems. These include cancer, heart disease, congenital heart problems, diabetes, asthma, HIV-AIDS, or obesity. Generally, these conditions are uncovered through a required physical, or review of a person's medical records. Each of these conditions makes it more likely that a person may die before their average life expectancy. As an obviously bad business risk, term life companies will decline these applicants since the likelihood of payout is more likely.
Another common reason for a term life rejection may be a person's involvement in high risk occupations or sports. For example, a person who works in hazardous waste removal where toxins may impact a worker's health may be uninsurable for term life. Sports such as scuba diving, parachuting, and mountain climbing also indicate high risk. These dangerous pastimes put applicants squarely on an underwriter's radar, the red flag goes up, and a rejection is the end result.
Lifestyle choices also impact eligibility for term life insurance. Smokers are bad news to insurance companies. Since smoking is now known to be an extreme health risk, smokers are less likely to become insured through term life. The same applies to a history of substance abuse. Abusing alcohol or drugs (or both!) compromises health as well as safety and may even impact wise decision making. Underwriters also check driving records to assess risk. For example, a history of DUI convictions may exclude an applicant since the likelihood of accidental death via a car crash is much greater.
Fortunately, even high risk term life applicants can often obtain term insurance. Different companies and underwriters have varying views on what exactly constitutes a risk. People who have been rejected by one company should always contact another, if for no other reason than to find better rates. Remember, term life insurance quotes are readily available to anyone and each company sets its own policies. Whether low or high risk, consumers need to shop around for the best deals.
