Declined or Rated for Life Insurance: What are Your Options?

guaranteed issue life insurance smoker

Update: Oct. 2, 2015

When this post was originally published, BGS had ceilings on coverage levels, $500,000 for the Life Protection and $3,000 per month for the Disability Protection. They have since been able to get those coverage limits removed. So applicants can now purchase as much coverage as they qualify for based on their income for Disability Protection and outstanding mortgage loan amount for Life Protection.

If you ask Paula Cook, Certified Health Insurance Specialist and account manager for Bingham Group Services Corp. in Vancouver, B.C., she’ll tell you that the industry statistics lie as far as how many Canadians are actually declined for life insurance.

“The ‘standard answer’ that you will hear from the market players is
10-15 per cent, but the ‘real answer’ is closer to 40 per cent,” she says.

So, what happens if you are one of those unlucky 40 per cent that finds themselves declined for life insurance or rated (required to pay a higher than normal premium) on a life insurance policy? What are your options?

In Cook’s opinion, the prognosis isn’t good. In fact, it looks rather bleak:

“Options, by necessity, become limited. A ‘decline’ or a ‘rating’ by
one insurer begets further ‘declines’ and makes a customer in the life
insurance market, going forward, more complicated and problematic. Typically, a customer will have to settle for a much more limited scope of life protection, such as Accidental Death Protection, or go without.”

Thankfully, there is a silver lining. Cook’s own company, and many other life insurance carriers these days, offer Guaranteed Issue Life Insurance Plans. Unlike Simplified Issue Plans, which carry between three and twelve health questions, Guaranteed Issue plans have no health questions and no medical tests or any barriers to approval. If you were to buy the Guaranteed Issue plan offered by Bingham Group Services Corp., you would receive the following:

  • Guaranteed issue (nobody is declined, ever, notwithstanding whatever their medical history may be)
  • Meaningful full life and disability coverage
  • No medical questions
  • Instant issue
  • No ceilings on face amounts

While Guaranteed Issue policies are perhaps “more limited” in their coverage scope than regular individual life insurance plans, they also mean that there can be an option for everyone and no one necessarily has to go without life insurance.

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  • Donna
    August 30, 2013 at 10:37 am

    I was recently declined for life insurance because of my blood pressure. What are my options millions of people have High Blood PResssure

    • LSM Insurance
      August 30, 2013 at 12:20 pm

      Hi Donna, You could try a simplified issue policy no health questions and a short series of health questions. But there would be a 2 year waiting period for non accidental deaths. High Blood pressure applicants can generally get coverage, you could reapply once your blood pressure readings are under control.

  • GYG
    August 30, 2013 at 5:24 am

    How much would the rating be reduced if I quot smoking, I have my … policy number …. fr 3 years.

    • LSM Insurance
      August 30, 2013 at 8:17 am

      Your smoking does not produce but smokers do pay an extra pay so equates to almost the same thing. The savings could be significant more for Term policies than Permanent plans. You would have to contact your insurance company or advisor to find out what the new premium would be and the necessary paperwork.

  • Colin
    June 11, 2013 at 12:36 pm

    What kind of life insurance can I still get if I was just declined.

    I would hate to go through the whole thing and just get declined again. I have to tell you the entire thing was a huge pain. Meet with the agent, complete the application, meet with the nurse, had to go in and see my doctor and they write my doctor and three months later I was declined. What a waste, why can’t you just save my time and let me know right of the bat instead of pulling all my strings.

    • LSM Insurance
      June 11, 2013 at 1:58 pm

      Hi Colin,

      Sorry to hear about your bad experience. On a traditional life insurance application the insurance company has to verify your details to make a decision. The broker can make a pereliminary for high risk applicants who look like they will be declined from the start. Simplified issue life insurance is another good option for higher risk applicants. There are no medical tests and a short series of health questions so you know right from the start if you will be approved. The rates are higher on these plans than traditional life insurance plans.

  • Reginald
    June 11, 2013 at 11:51 am

    This article is spot – thanks for the information.

    • LSM Insurance
      June 11, 2013 at 1:52 pm

      Thanks for the kind words

  • Tamara
    June 10, 2013 at 8:29 pm

    How Can I find out why I was declined?

    • LSM Insurance
      June 11, 2013 at 8:12 am

      Hello Tamara, You could send a signed written request for the insurance company to release the results and reason for the decline to your doctor.

  • Gaston
    June 10, 2013 at 7:24 am

    Can I get a quote on no medical life insurance. I’m 67 don’t smoke thinking $20K

    • LSM Insurance
      June 10, 2013 at 8:46 am

      sure we are happy to help out. The premiums will depend on the type of plan. We will be in touch by email soon

  • Robert
    May 28, 2013 at 5:42 pm

    Can I sttill get life insurance if I have HIV? I’m 48

    • LSM Insurance
      May 29, 2013 at 1:24 pm

      Yes you can qualify for a Guaranteed Issue policy no medical tests and no health questions. We will send you an email with more details.

  • LSM Insurance
    May 7, 2012 at 12:44 pm

    Good point – many simplified issue plans ask if the insured has been declined and if he or she has to answer yes this could limit their options.

  • Mitch
    May 7, 2012 at 10:07 am

    It’s important to work with an experienced life insurance broker because they might know which company will maybe cover certain health conditions. If there it’s serious doubt about getting approved for insurance it might be best to get no medical life insurance first before making a formal application with medical evidence.