Have you been denied for your life insurance due to your prescription history? if so read below..
If you got denied for life insurance because of your prescription history, it is typically because of the lack of preparedness from the life insurance agent or the applicant. The insurance applicant is to blame usually because of inaccuracies or dishonesty, while the insurance agent is typically to blame because of the lack of experience and/or the lack of resources. Read below to find out why exactly you got denied life insurance policy. Also, read our guide on how to fix it.
TOP 5 REASONS WHY YOU GOT DENIED
There are many reasons why your prescription history might have cost you a life insurance policy. Most of the time it was probably preventable. Here are the most common reasons you come accross...
1. YOUR INSURANCE AGENT WAS CLUELESS
Your insurance agent might mean well but does not necessarily know much about underwriting. if you got denied for life insurance due to prescription history, chances are that your insurance agent wasn’t aware of the procedures and the steps to get qualified..
Your insurance agent will never be 100% sure whether or not you will qualify. However, he should be aware of potential red flags and know who to reach out to when these situations occur.
A perfect example is someone taking a drug for headache that could also be used for mental illness. In some instances, the drug could get you declined. In other cases, it should just be a note on the underwriter’s radar.
An agent who is unaware would just skip by that fact and submit your application without a note. The underwriter may think that you as the applicant are withholding information and you could be denied because of a simple omission.
2. your agent was not independent
Another reason why your prescription history caused you to get denied for life insurance is because your insurance agent was not an independent agent. He was what we call a captive agent.
Captive agents work typically for one company. In many cases they are not allowed to write policies for other companies. Because they only deal with one company, they are not familiar with how lenient some other companies can be.
If your agent was a captive agent, he most likely submitted his best case to his company. But even if he did a great job, if his company doesn’t look at your particular condition favorably, you will be denied.
Some companies have what we call a “knock-out” medication list. This means that no matter what, if you’re taking these “knock-out” drugs, you will be declined.
Other insurers prefer to look at your specific condition to see if taking your policy will be a risky move. You might take just a small dosage or maybe you might take it for a more stable condition.
Dealing with a captive agent, you will never know that you could have been eligible for these more lenient insurance companies.
3. you were not honest with your agent
The third reason why you may have been denied for life insurance is because your were not totally truthful with your agent. Even if you work with a an experienced agent who is also independent, if you have not answered his questions truthfully you run the risk of getting declined.
Maybe you thought that the detail was not important enough. Oh maybe you thought that they will not find out about a certain medical issue but being dishonest on a life insurance application can be detrimental for you current application and potential your future applications as well.
Life insurance companies frown at dishonesty they will potentially declined you solely because of it. They figure that if you lying about one aspect of your health, what's to say you are not lying about other pertinent questions on the application.
Therefore it is important To be honest with your agent so that he can come up with his best game plan. There is almost always a way.
4. you were not aware of your medical history
The fourth reason why you got denied is because you did not have full knowledge of your medical history. A common example of this are our clients who have had a medication prescribed that they forgot about.
They may have decided not to take it or maybe there was a change of plans from your doctor. However you should know that there are many ways for the insurance companies to obtain access to your prescription history.
There are third party services whose sole purpose is to collect your medication information. Insurance companies will then buy those records so they can make sure your information is accurate.
Now although you’re not lying, the fact that you’re not on top of your medication history signals to the insurance company that you may not be taking your health seriously.
This is again where honesty becomes paramount, let your agent know that there are things that you may have forgotten about.
5. you did not take your medications
Lastly one of the most common reasons people don't get approved for life insurance is because they do not take their prescribed medications.
If you’re applying for a “No Exam” Life insurance policy, this is probably not the reason why you got declined. Otherwise, when applying for a fully underwritten life insurance policy, it important to know that there is always the chance of the insurance company requesting a statement from your doctor.
Your doctor is the obligated to accurately describe your compliance with his instructions. Even if your doctor never brings it up, he knows whether or not you’re taking your medications just by checking how often you refill your prescription.
The reason the insurance company cares is two fold. The obvious reason is if you’re not taking your medication, your condition is likely to worsen overtime which might lead to more chronic illness and potentially a premature death. Secondly, again it shows the company that you are serious about improving your health.
5 WAYS TO FIX IT...
The above scenarios are quite common reasons why people get denied for life insurance. But if you have a questionable prescription history, we do have some solutions that have worked quite well for our clients. Here are 5 solutions that may help you reverse your denial..
1. WORK WITH AN AGENT WHO UNDERSTANDS UNDERWRITING
If you have a preexisting condition you should definitely always work with a life insurance agent understands the underwriting process. a life insurance who focuses underwriting will familiarize himself with the insurance company’s “underwriting guide”. In many case, the guide states specifically how they view the most common medical conditions.
If your agent is not familiar with the underwriting guide, it could potentially cost you 100’s of dollars. It could even get you denied for life insurance.
A resourceful agent also understands the importance of having a strong working relationship with the insurance underwriters.
Let’s face it no agent can accurately predict every outcome of an insurance application. Some situations are tough to call. However the savvy agent knows to present a better case to the underwriter.
An example is to draft a letter on your behalf, highlighting your good habits and your dedication to healthy lifestyle. This can go a long way on improving a potential decline to an approval.
2. WORK WITH AN INDEPENDENT AGENT
Now the second way to fix a denial of a life insurance application is to work with an agent who is truly independent.
If you have suffer from a pre-existing medical condition, you should work with someone who has the ability to present your case to multiple companies.
Each insurance company has its own niche. The insurance company who’s lenient with people with prostate cancer is not necessarily the go-to company for someone with a history of heart attack.
This is why your agent needs to be familiar with the underwriting guides from multiple life insurance companies. It benefits you when your life insurance agent has options. More options mean better odds for approval and at the very least more affordable premiums.
3. BE UPFRONT AND HONEST WITH YOUR AGENT...
We understand divulging all your personal medical history can be quite frightening. But keep in mind that your insurance agent is your last line of the fence in front of the life insurance company. He/She is supposed to go to bat for you. Experienced Insurance agents see a tough medical conditions as a challenge.
Simply put, we can’t present the best case to the underwriter, if we’re not truly honest up front. As previously mentioned in this article, underwriters get skeptical when someone withholds information. This comes off as if you’re trying to hide something.
We have seen many clients get declined just because the insurance company found out about a condition or medication after the fact. if the same clients were to divulge this information upfront, the outcome would have been different.
Lastly as insurance agents we can go to bat for you by setting up a pre-emptive strike on your behalf this means if we have a condition that we know will be tough to underwrite,f we have the options of drafting a letter to the underwriters, letting them know upfront about your condition and also explain why you have made it your lifestyle to become healthier.
4. tAKE YOUR HEALTH SERIOUSLY
Of course the insurance company doesn’t think you can cure any disease by improving your health. However they appreciate the people who put forth the effort and discipline. They want you to take care of what you can control. Visit your doctor as scheduled, follow his instruction, take your meds etc…
They also know that some health conditions can improve. There may not be a cure for your condition, but there is usually a way to stabilize it. You could do this by way of taking some sort of medication or living a healthier lifestyle. This is why life insurance companies take a “wait and see” approach. These cases below will illustrate what we mean…
For example a 65 year old with a recent heart attack, most likely won’t be eligible for a level benefit life insurance policy. However, after 2 years of stabilization, they should be able to obtain a small life insurance policy worth up to $50,000. For higher death benefit amounts, they would have to wait even longer.
We received a call this time last year from a young woman who was hospitalized due to Crohn’s disease. She was actually at the hospital when she called us. Since this is a recent occurrence, no insurance company will taker her. They want to make sure that she makes it out somewhat healthy and has no re-occurence. In this case, some companies are wiling to offer her a policy after one year of her condition being normal. She will only qualify for substandard rate. By this time next year, she can re-apply for even a better rate, provided she stays healthy.
5. TAKE YOUR MEDICATIONS
People who follow their doctor’s instructions have a much easier path to qualify for life insurance, especially the fully underwritten types. For smaller death benefit and basic burial insurance types, companies don’t dig that deep. However, if you have a major health condition and are seeking a life insurance policy for $100,000 or higher, your doctor will need to provide a “physician’s statement” for your application.
If it’s shown that you have not been taking your medication on a regular basis, your underwriter might deem your situation too risky to take a chance.
On the other hand, if you have a tough medical condition but your doctor can vouch for you being disciplined with your medication and your doctor visit, you might qualify for a policy that you may have not otherwise qualified for.
What if You did everything right?
If both agents and the insurance applicant elected everything correctly then chances are the reason you got denied your life insurance policy is because you were not in insurable in the first place in this case the best way to tackle that issue is to improve your health make sure your condition stay stable and reapply in a couple years when the insurance company is more likely to issue you a policy for your given condition.
How we have helped our clients
Case study #1
We had a young lady reach out to us because she got denied for life insurance due to a medication she was taking. She had previously been injured in a car accident and was taking a medication due to some nagging migraines.
This medication apparently is also known to be used for mental health issues. The insurance company she had applied for is known to be lenient on many conditions. Her agent figured that she would probably be approved.
However, just because an insurance company is lenient on many common conditions, does not mean it is on some of the more niche situations out there.
For us, this was an easy case. We realize that we just had to clearly explain to the underwriter what was going on. We apply with a different company who is known to be tougher but because we were upfront and explain her circumstances, he was not only approved but she received standard rates.
Case Study #2
In this particular case, we were approached by a different life insurance agent. He knows that we focus on people with tough underwriting cases. He tried many different avenues for this client to no avail.
This young 20 something lady was dealing with a mental health issue and taking multiple medications. The fact that she was so young was a red flag for most insurance companies.
Thankfully, she was looking for a small policy to cover her final expenses. While there are plenty of these types of options for folks over 40, there are not too many options for younger applicants suffering from severe mental health issues. We have access to a small life insurance company who offers final expense product to a younger crowd. We secured her a $25,000 policy.
THE BOTTOM LINE ...
If you’ve been denied for life insurance due to prescription history, not all is lost. There is hope at the end of the tunnel. You may have just been denied because you didn’t know any better. Hopefully this short guide put you back on the right track.
The answer to your problem boils down to 3 solutions
-You should definitely go with an independent agent who understands underwriting. It’s not that captive agent are bad, they just don’t have the options and independent agent does.
You should take control of your health. By showing the insurance company that you are willing to improve your health, they may look at you favorably.
-Be honest and upfront with the insurance company and your insurance agent. By being honest with your agent, you are allowing him/her to be creative and find the niche company that will look at you favorably.