What Should I Do If My Application Is Declined?


When someone applies for life insurance in Canada, only one of three things can happen:

1. The policy is approved. This happens to about 80% of all applicants, although the number is much higher among younger applicants, since younger people are generally healthier.

2. The policy is issued, but on a rated basis. This means that the insured is approved, but the premiums are higher due to health or lifestyle issues.

3. The application is declined. Once again, this would be related to health or lifestyle issues, but in this instance the insured is denied insurance completely.

The first step to take when someone has been declined for life insurance is to find out why he or she has been declined. Insurance companies will likely not provide these details to your broker due to confidentiality legislation. The insured can get this information mailed to his or her doctor by providing authorization to the insurance company.

Once the insured finds out why he or she was declined, he can verify if there was an error in the decision and/or if the insured’s health issues can be readily rectified.

If it is a condition that is unlikely to stabilize or disappear, the insured can look at non-medical life insurance solutions. Non-medical life insurance can take the form of guaranteed issue coverage, which is available without a medical and without health questions, or simplified issue coverage, which is available without a medical, but with anywhere from three to twelve health questions. Simplified issue plans however, can offer coverage from day one and offer lower premiums and higher face amounts than guaranteed issue life insurance plans.

The number of Simplified issue providers has increased dramatically in recent years.  Assumption Life and Canada Protection Plan underwritten by Foresters Life Insurance Company are two key players in this space.

Assumption Life’s flagship plan Golden Protection is available on a Deferred or an Immediate Pay basis and the plan  is available with a level or increasing benefit.  Canada Protection Plan has a Deferred and Immediate pay Permanent and Term policy.  Their Term plans are available as a Term 10, Term 20 or Term 100.  The Deferred plan has face amounts up to $150,000 and the Immediate pay plan up to $200,000.

A 50 year old male non smoker would pay the following premiums for a Canada Protection Plans Term policy.

$100,000 Deferred Term 10 $78.87 a month

$100,000 Deferred Term 20 $105.66 a month

$100,000 Deferred Term 100 $204.84 a month

$100,000 Simplified Issue Term 10 $50.13 a month

$100,000 Simplified Issue Term 20 $70.20 a month

$100,000 Simplified Issue Term 100 $198.18 a month

The Deferred plans have a death benefit limited to a return of premium plus 3% interest for non accidental deaths in the first two years and the Simplified Term plans provide coverage from day one. The Simplified Issue plans have a longer series of health questions one of them being has the insured been declined for insurance in the last two years.


For more details, please contact us at 1-866-899-4849 or visit our Non-medical Life Insurance Quote Page.

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  • Josephine
    September 27, 2013 at 1:55 pm

    I was declined at the bank for line of credit of insurance – do I have to declare this on my application. I shouldn’t have even been decined but that’s another story

    • LSM Insurance
      September 27, 2013 at 2:03 pm

      Hi Josephine, Thanks for the note. It really depends on the question on the application is worded.

      If unsure I would disclose it. Keep in mind that you still may be able to get coverage. Creditor Life Insurance policies are usually declined or approved standard nothing in between an individual life insurance can be rated – i.e. coverage id available but with an extra premium based on the extra risk.