Life Insurance Application Question

Bull Hunter · 04-24-2008, 07:40 PM

Well, I have learned a little something today. Last month we tried to enroll my wife and I in the group life at work and today we received a letter that the application was denied.

My wife has some medical history and it does not surprise either of us that she would be denied. I on the other, hand have a fairly squeaky clean history and was able to answer no to all of the "questions" on the evidence of insurability form. The reason for the application being denied was due to a reason that is solely due to my wife's history not mine.

I feel stupid for trying to insure her knowing that coverage for her was questionable but I thought at least they would still review me and provide coverage for me.

Is it normal for them to just blanket deny the entire application because of one of the applicants or am I missing something? Do I have any recourse? Should I just move on and find a different insurer?

E

matttheduck · 04-24-2008, 08:09 PM

Hm...I'm trying to understand the insurance company's perspective here. I can understand why they would deny your wife, but it's not like it's a package deal where your fates are inextricably tied together.

I would suggest you apply - on your own - for some term life insurance. There are plenty of companies that advertise on financial radio shows. You can get $1 million worth of coverage for a reasonable amount, if you need that much.

Your wife might be insurable in the same way, although premiums may be much higher depending on her condition(s). If you don't have kids and have a good career, you might be able to go without on your wife.

Duckwheat · 04-24-2008, 09:39 PM

Employ term insurance is not a good buy. You would only buy it if you can't get it on your own.

If you are in good health and no issues you can do a lot better on your own. A lot better. Term has gotten pretty cheap.

Couple of things to consider when you buy some life insurance. These are my opinions after having sold it for about 12 years.

Dont confuse life insurance and a investment. The cash accumulating policies by any name have pretty high internal cost. There are some reasons you still might buy one, but they are limited.

Consider getting an option to buy additional insurance without going through underwriting again.

Second consider getting a policy you could convert from term to a whole life policy, again without having to requalify.

What if you get something bad. You might want to convert the term to the whole life policy without having to requalify. Same scenario, and you need to get some more insurance. You had another kid, the wife quit working, college, whatever.

These are not new but you need to ask about it. You will pay a little to get it, but might pay off.

Back to your wife, usually an employee can get a guaranteed amount without qualifying. Find out if that is the case. If she can, might be worth getting.

Dw

Iwish · 04-25-2008, 12:49 AM

Bull Hunter,

Typically they don't blanket deny policies like you are describing. The only logical explination would be if you applied for a policy with an additional insured rider. By this, one of you would have been the primary applicant and the other, similar to a co-signer on a loan, an additional insured. I'm not sure that's what was done here but it's the only possibility I could come up where they would just deny you for no apparent reasons.

That having been said, now you will have to answer a very specific question when filling out any future applications which will make it more difficult on you. They always ask you, "Have you ever been denied insurance?" This doesn't mean that you can't get insurance but you will have to answer a few more questions and they will probably look a little closer at your history.

Also, with your wife, just because she has a medical history doesn't mean that she will always be uninsurable. Many concerns that would deny an application now will be waived over time. In some cases she may just be rated now on those issues and as time passes you can even get better rates based on your current health. For instance, most policies have the ideal height/weight classes for men and women. If you are considered to be overweight when you buy the original policy and a year later you have lost enough weight to get a better rate then you can get an adjustment. Same thing with tobacco use, Blood pressure, cholesterol and other major issues such as cancer.

There are definitely other options out there. If your desire is to have some life insurance in place for both of you, it is still possible to get some, maybe not as much, but at least have some in place in case something should happen and then you can add to it at a later date. Everybody you talk with will have an opinion and you just need to find out what works best for you and your family.

Feel free to shoot me a PM and I would be happy to talk with you in more detail regarding your specific issues. I'd be glad to help in any way I can.

Bull Hunter · 04-25-2008, 05:15 PM

You folks are right. This morning I went straght to HR to see what was up. They had a different letter than I had. The one I had was addressed to me and said that the policy was denied. The one work got said it was just my wife.

So all is not as hopeless as I thought. Sure was a weird few hours for us though.

Duckwheat you have me thinking and I will explore other options as well.

Thank you for your responses.

Eric