When you have a serious health condition, many tend to believe that they will get denied life insurance. Normally that isn’t the only reason, many other factors lead to denial of life insurance. Such as if you have multiple DUIs or reckless driving, if you have a history with drugs/alcohol, a criminal record and even bankruptcy. Here we will help you on your next steps if you have been declined for life insurance and also explain graded benefit life insurance.
What To Do If Declined
If you are declined for life insurance there are still measures you can take. First you need to decide if one company declined you but another one might approve you. There are many cases where someone will be declined but then another company will accept them. Every life insurance company has different guidelines and rules for risky situations, but having a knowledgeable agent helping you can help you get approved or denied.
Graded Benefit Life Insurance
Once you know for sure you can’t get “normal” life insurance, what are your other options? With age being a key factor, you can get approved for many policies. Guaranteed life insurance, also known as high risk insurance, or graded life insurance are different types of insurance that are for people that have “high risk” and can’t get a regular policy.
So how does it work?
A graded policy is graded as the name states. This means that there is normally a waiting period between when your coverage will actually start. Some companies will have a two year waiting period and some will have a three year waiting period.
If the person getting the plan dies before the end of the waiting period, then the beneficiary will get back all the payments that person made, plus a little interest. After the waiting period is over the full coverage amount begins to be in effect.
There is also normally a limit on how much coverage you can get with a graded life insurance policy. For example some will offer a maximum coverage of $150,000 for one company but another will only have $25,000 maximum.
What Companies Offer Graded Life Insurance?
There are many that offer this, here are two examples…
Fidelity’s graded is offered to seniors over 50 years old! They are also unique because they offer term and whole life insurance. Most companies will only offer whole life insurance for graded. They also offer up to $150,000 of coverage and the process is so simple you can get approved in one day!
United Home Life
The United Home Life offer coverage starting at the age of 20, meaning if you are younger than 50 and can’t get Fidelity Life, then this is a good alternative. They will offer whole life graded up to $25,000.
There are health questions you would have to pass for both companies to qualify. If you don’t pass though, you can still get a Guaranteed Issue Policy.
How Much Coverage To Get
The downfall for these plans is that you are limited to how much coverage you can get with this plan. Most will only allow $150,000, such as Fidelity Life. For most that isn’t enough for their whole families. Not having enough insurance is always a mistake most can’t afford to make. So before you get one of these plans you need to figure out how much you need.
First you should look at is your debts and other final expenses. The main reason for life insurance is to help your family pay off any of your outstanding debts and bills.
Next you need to account for your paycheck. If you are the main provider for your family you need to make sure your policy is enough to cover your income.
Once you’ve added these together, you may find that a guaranteed plan isn’t enough for you.
If you have been declined coverage, you can still get the coverage you and your family needs.
Guaranteed Issue Life Insurance
With this policy there is no health question requirements. An example of a company that offers this coverage is Gerber Life. The company that offers life insurance for your kids will also will offer Guaranteed for people over 50 years or older. You can receive $25,000 without any qualifications and there is a two year waiting period.
There is also AARP and Colonial Penn that you have probably received on TV. These tend to be overpriced though.
All companies are different and all have different rating and medical systems in place. The quotes will all depend on the company you contact.