LIFE INSURANCE:
6 Reasons of Policy Denial by Companies DIGITAL MEDIA MARKETING MB Enterprises
This article lists down the top 6 reasons why life insurance is
possible unless you have worked with specific insurance
not acceptable by a life insurance group. These reasons
companies.
includes health issues, participation in high-risk activities, specific financial reasons, filed for bankruptcy, DUI, and
3. SPECIFIC FINANCIAL REASONS FOR LIFE INSURANCE DENIAL:
having a criminal record.
The need for financial justifications is a big financial reason for a decline in life insurance by a company. In simple words
1. HEALTH ISSUES- A CAUSE OF LIFE INSURANCE DECLINE:
there is an intense need for financial justifications that a client
The life insurance is normally declined by an insurance
must provide in order to move forward. The insurance
company because of health issues. As an example if
companies makes sure that the client is financially not weak
someone is at high-risk of life and suffering from a disease
and have all the reasons to apply for a life insurance policy
like Cancer. Hence, ironically the Life insurance company
i.e. highly justified.
risks are increased and that’s another reason why companies don’t think it’s worthwhile.
The qualification for the client also depends on the earnings per annum. As an example we can say that somebody who
For this particular reason i.e. involvement of high risk the
has an annual earnings of $25,000 per annum would most
person might have applied with the wrong company.
likely not qualify for $1,000, 000 life insurance policy. These are calculations for the Insurance companies and insurance
The best solution is to have a high-risk life insurance agent
companies know how much a client can qualify for keeping in
who can provide with an insurance company that is willing to
mind their earnings. Earnings play a huge part as they mean
give an insurance on such a high risk to life. However, this is
financial security for the client.
possible as companies are willing to move forward with those who can give an insurance on health risks.
4. FILED FOR BANKRUPTCY: If a client has filed bankruptcy due to a loan or they can’t pay
2. PARTICIPATION IN HIGH-RISK ACTIVITIES- A LIFE THREAT:
a mortgage payment, in this case the financial circumstances
Participation in high risk activities is a huge reason why
are overlooked by companies. Usually there are a huge
companies deny life insurance. As an example a simple case
amount of companies that will deny the life insurance policy
is that while most companies insure scuba divers. This
straight away due to bankruptcy being filed. Here the risks are
depends on the type of diving that you do i.e. (open water vs
high and high risks means less financial security. The word
cave diving). The other factors that some insurance compa-
‘Financial Security’ is the key for finding a solution that is
nies will not insure you if you are a scuba diver are as follows;
good enough for Insurance companies.
the amount of time you dive a year, how deep you dive & where you dive.
5. ISSUES ASSOCIATED WITH DUI (DRIVER UNDER THE INFLUENCE): Having a DUI i.e. driving under the influence is a negative
Other set of people are actively deployed military personnel
record and hence can have a negative impact on the life
who had a hard time getting approved. This cannot be
insurance policy of the client. Having more than three DUIs in
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MBE BUSINESS MAGAZINE APRIL / MAY 2020
W W W. M B E F O RYOU. C O M
