Life Insurance is a necessity of this modern financial world. Top 6 reasons why companies deny to provide life insurance coverage. The reasons include health issues and participation in high-risk activities. It also includes specific financial reasons, filed for bankruptcy, DUI, & having a criminal record.
Hence, to have coverage from most insurance companies, the associated risks with life insurance should be minimal.
HEALTH ISSUES- A CAUSE OF LIFE INSURANCE DECLINE
Health issues are the most common ones that are the cause of companies declining life insurance. As an example, if someone is at high-risk of life and suffering from a disease like Cancer. The person is categorized to have a high-risk of life due to this particular reason. Hence, an automatic increase in risks associated with life insurance companies. This is another reason why they don’t think it’s worthwhile enough to take a risk.
For this particular reason i.e. involvement of high risk, the person might have applied with the wrong insurance company.
The best solution is to have a high-risk life insurance agent. Someone who can provide a useful insurance company. What’s needed is a company willing to give insurance on such a high risk to life. However, this is possible as companies are willing to move forward with those who can give insurance on health risks.
PARTICIPATION IN HIGH-RISK ACTIVITIES- A LIFE THREAT
Participation in high-risk activities is a huge reason why companies deny life insurance. As an example, a simple case is that while most companies insure scuba divers. This depends on the type of diving that you do i.e. (open water vs cave diving). The other factors that some insurance companies will not insure you if you are a scuba diver are as follows; the amount of time you dive a year, how deep you dive & where you dive.
If you have traveled internationally, or you live abroad for a certain period of time. Hence, there are some companies that will not insure you. Military personnel deployed somewhere are the other sets of people who will face hardships for approval. This cannot be possible unless you have worked with specific insurance companies.
SPECIFIC FINANCIAL REASONS FOR LIFE INSURANCE DENIAL
The need for financial justifications is a big financial reason for a decline in life insurance by an insurance company. In simple words, there is an intense need for financial justifications. These are justifications that a client must provide in order to move forward. The insurance company makes sure that the client is financially not weak. In addition to this, it has all the reasons to apply for a life insurance policy i.e. highly justified.
The qualification for the client also depends on the earnings per annum. As an example, we can say that somebody who has annual earnings of $22,500 per annum. Hence, that client would most likely not qualify for $1,000, 000 life insurance policy. These are calculations for the Insurance companies that they do separately for everyone. The companies know well how much a client can qualify, keeping in mind the earnings. Earnings play a huge part as they mean security for the client. The higher the security, the lesser the risk for disapproval by most life insurance companies.
FILED FOR BANKRUPTCY
If a client has filed bankruptcy due to a loan they can’t pay or any mortgage payments, in this case. Hence, insurance companies do overlook financial circumstances very carefully. Usually, there are a huge amount of companies that will deny the life insurance policy. While the client files bankruptcy which is a big reason for the disapproval of a policy. Here the risks are high and high risks mean less financial security. The word ‘Financial Security’ is the key to finding a solution that is good enough for Insurance companies. These companies need high and consistent assurance to move forward.
ISSUES ASSOCIATED WITH DUI (DRIVER UNDER THE INFLUENCE)
Having a DUI i.e. driving under the influence is a negative record and hence can have a negative impact. These are impacts on the life insurance policy of the client. In case a client has more than three DUIs in the last 10 years. Therefore, every insurance company would decline your life insurance policy. However, having at least 1 or 2 DUI’s in the last 10 years is better. This means some insurance companies will decline you while others will approve.
Having applied with DUI it is most possible that the client has probably applied with the wrong insurance company.
If you are someone who is a drug abuser or alcohol abuser. Therefore, this is most likely that you will be declined life insurance. One of the most prominent reasons for denial is the risk level. Accidental death risk is a key reason for denial of life insurance. On a conditional basis, some companies can give the client an insurance offer. This is only if the client has stopped drug abuse for the last 3 years. Additionally, no abuse of alcohol for the last 2 years. The objective of the client should be to convince the insurance companies if they need an approved insurance policy.
HAVING A CRIMINAL RECORD
In order to have a life insurance policy, it is important to have a clear CRB i.e. Clearance from the Criminal record bureau. Having a criminal record means that the client can be under a life threat. Hence, his authority to have a life insurance policy is not safe. Having a good character reference check is a necessity. Criminal record means the person is unfit for the criteria.
However, on conditional grounds, things can definitely vary. Apart from many reasons last criminal conviction is one of the reasons for a positive condition. Along with this, when did this conviction expire. Finally, how many convictions were the person under for the last 2 years? Based on these checks the client might get insurance coverage depending on how long ago the probation ended.
However, coming in such a category it’s better to work with a high-risk life insurance specialist. A high-risk insurance specialist will definitely be of great help.
MBE INSURANCE- A POLICY INTO ACTION
Since MBE Group is a company based in Canada, MBE insurance is part of the MBE Group. According to the Canadian rules, MBE insurance also follows similar procedures that relate to Life Insurance and its risk assessment.
MBE Insurance also makes sure that their prospective clients are worthy enough according to the risk assessment procedures. It’s our policy to give Life Insurance to clients with lower risks involved. Primarily, the reason being profitability and future profitable options.
Being a new company the goal is to provide sustainable measures to our clients with low-risk levels.
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