Life insurance can provide a financial safety net for your loved ones when the worst happens, but getting approved can sometimes be an uphill battle. Aside from health considerations, there are a number of other things that insurers take into account. If you’re worried about getting turned down for life insurance, here are five factors that can affect your application.
1. You’re a Terrible Driver
More than 32,000 people died in car accidents on U.S. roadways in 2013 and in many cases, the fatal wrecks were caused by reckless drivers. One of the things insurance companies might look at when you apply for a life insurance policy is your driving record. If your history is spotted with fender benders, speeding tickets or more serious offenses, you might seem like a bigger risk to an insurer.
2. You’re a Thrill-Seeker
Accidents of all kinds resulted in over 130,000 deaths in 2013. If you’ve got an adventurous outlook and you like to engage in dangerous hobbies like sky-diving, rock climbing or white water rafting, those are all things that could prevent you from being approved for a life insurance policy. The riskier your lifestyle, the more cautious an insurer might be about extending coverage.
3. You Don’t Make a Lot of Money
Surprisingly, insurance companies might care about the size of your paycheck. Depending on the company, you may have to prove that your income is above a certain threshold before the insurer agrees to cover you.
4. You Regularly Travel Overseas
If you routinely travel abroad for business or pleasure, those frequent getaways could make a life insurance company put the kibosh on your application. Insurers sometimes assign risk levels to different countries based on the likelihood that you would contract a serious illness there. Spending time in places labeled as “hot spots” could work against you and even if you are able to get approved for life insurance, you might end up paying higher premiums.
5. You Bungled the Application
When applying for life insurance, you often have to answer an extensive list of questions about your health and your finances. Inflating your income or otherwise fudging the truth about anything could be automatic grounds for a denial, so honesty is always the best policy.
Even if you don’t intentionally make a mistake, leaving out crucial information or guessing at something could raise an eyebrow with the insurance company. This is especially true when it comes to things like your height or weight since any inaccuracies will likely show up on a medical exam.
What To Do If You’re Denied
If you’re turned down for life insurance, you might still have some options. You can check to see if your employer offers life insurance as part of its benefits package. The policy limits may be lower than what you’d get at an independent insurance company, but it could be better than nothing.
You could also look into guaranteed plans that don’t require medical exams. The downside is that premiums for these plans tend to be more expensive. But if you need life insurance, this kind of policy can give you peace of mind. And if all else fails, you can always apply again (maybe after you’ve improved your health, corrected application mistakes or improved your driving record).