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Declined or expensively rated for insurance?


Have you been declined or expensively rated for life, health, long-term care insurance? You can do something about it…

Questions to consider:

If you are declined or expensively rated by one insurance company for life, long-term care or disability insurance, find out

  • Why?
  • What can you do about it?
  • Could time’s passing qualify the person being insured to get the insurance? or drop the premium cost?
  • Could other carriers charge much less?

Many aspects control the price of a specific health-related insurance policy; a major one is the health of the person being insured, as well as risky life-style (e.g. the insured skydives, climbs mountains, travels to risky areas, smokes, has a DMV or criminal record). The higher the health or habit/ occupation risk, the higher the “rating” and, thus, the more expensive will be the policy.

Various insurance carriers can price very differently for the identical person and risk: They take very different views on:

  1. the death or incapacity risk of the identical person and
  2. appropriate pricing for the identical coverage assuming the identical risk rating: one carrier may charge half of what another charges.
  • Shop around: if you get declined or expensively rated by one carrier another carrier may be very comfortable insuring you – shop around; ask.
  • Check your habits: there may be a very good reason why the carrier is proposing to charge you more than you expected. See if changing your habits (e.g. don’t sky-dive; stop smoking!) will significantly lower your premiums. However, you will probably need at least a 1-year history of this change for the carrier to feel you will continue this change.
  • A past procedure needs more time: sometimes the carrier doesn’t want to insure you because a procedure you underwent within the last year or two hasn’t had enough time to ensure it worked or that a habit change is established. If you don’t ask you may not find out if this was the problem. If so, what you really have is less a decline than it is a postponement. Find out how long you have to wait and reapply. Hopefully, nothing else has happened to compromise your health or risk.
  • Was there an error? Once in a while, the wrong person’s medical file is copied (e.g. a doctor’s office has two Jane Smiths as patients) so the carrier is making the wrong assumptions.

If you reapply with the same company, about the worst that could happen is that you keep the premium schedule you started with: it’s a no-lose option.

Jim got insured: One of my clients, Jim, was declined for life insurance because he was pre-diabetic and he wasn’t following his doctor’s recommendations. He changed his diet, exercised and got insured two years later with the same carrier.

Need help? Call me and I’ll try to help.

[AUTHOR: Del Hegland, Agent] CA Ins. Lic # 0D46533, New York Life Insurance Company]

August 3, 2014

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