Preston Newby worked as a youth pastor. He and his wife, Tara, were driving with their kid to see family, thrilled to announce the arrival of a new baby. Preston, being the kind of person he was, stopped to assist at an accident scene. That’s when he was hit and killed by another car. He was only 24 years old.
Fortunately, this young couple had planned ahead of time and purchased life insurance. So, despite the emotional turmoil caused by Preston’s death, Tara, a stay-at-home mom, and her two sons were able to carry on financially as before. You may watch their tale by clicking here.
How many other people have prepared for the unexpected in this manner? Unfortunately, not nearly enough: According to the 2019 Insurance Barometer Study by Life Happens and LIMRA, 43% of adult Americans do not carry life insurance.
“I’m young,” many people believe. That will never happen to me.” They may be correct statistically. They may, however, become one of the statistics. You simply don’t know—and that is the issue. Life insurance is the solution.
If you have people you care about who rely on you, or if you have financial responsibilities to meet, you need life insurance to safeguard against the “what ifs”—at any age. Here are a few reasons why you might need more life insurance throughout your life.
You may believe you don’t need life insurance because you don’t have any dependents, but if you owe money, you do. It guarantees that your debts, including student loans and burial costs, will not be passed on to your family.
Furthermore, whether you are already caring for aging parents or a special-needs sibling, or anticipate that you will in the future, life insurance is a wise method to ensure that care continues uninterrupted.
Married or partnered: As you begin your life together, you will almost certainly incur shared financial obligations, such as purchasing a property, in addition to monthly expenditures. It seems sense to provide enough life insurance for your spouse or partner. It’s also a good idea to get coverage in place now if you intend to start a family in the future.
Financial obligations abound for parents with children during this era. Many couples rely on two incomes to get by, and single parents may be their children’s sole caregiver. At this stage, life insurance is essential.
Remember that the economic impact you have on your family can be assessed not just by how much you make today, but also by how much you will earn over the length of your working life. The Human Life Value Calculator on Life Happens will assist you in determining this.
Empty-nesters/retirees: You may believe you don’t need life insurance because your children are grown and your mortgage is paid off. However, if you are still saving for retirement, life insurance ensures that if something happens to you, your spouse or partner will be able to live comfortably in retirement, regardless of any shortages.
Remember that life insurance is a straightforward solution to a critical question: Would anyone suffer financially if I died? If the answer is affirmative, you should consult with an insurance professional.
Life Insurance Refused? Here Are Your Next Three Moves
It’s upsetting to find that the life insurance company you applied to will not provide you with coverage, especially if you were hoping for a yes! You may be in the “impaired risk market,” which means you have a history of something that puts you at a higher risk of dying prematurely, such as diabetes, obesity, a previous cancer diagnosis, or even a history of DUIs.
While many applicants with this type of past are aware that they may face some challenges, being denied life insurance coverage is not any easier. However, this does not always indicate that the search for permission is done. There may still be possibilities, such as applying to a different business or a different policy type.
If you’ve been denied life insurance, these are three concrete steps you should take.
- Gather information.
Before denying an application, an insurer gathers a large amount of data from many sources in order to assess your risk. If the risk is sufficiently high, you will be evaluated, postponed, or rejected. In all of these situations, you have the right to request more information on the rationale for the refusal.
The carrier can offer specific information on why an application was refused, such as medical history, current exam results, driving record, or something else, upon request. Denials from current exams are the most upsetting because you may not have been aware of an ailment or disease earlier.
- Verify the outcomes.
Errors can occur. Crossing wires is possible. Check the information provided to the underwriter again. Confirm the cause with your primary care physician if poor exam results were mentioned. In other circumstances, a business may simply refuse coverage because to new, undiagnosed lab results, even if there is no reason to be concerned.
In other cases, you may be denied due to employment or recreational hazards, criminal records, or even financial hardship. Having outdated or insufficiently thorough documents can result in deferral or declines since the underwriter simply cannot determine an adequate risk profile.
- Collaborate with an agency.
Even with thorough study, the first firm to which you apply is not always the best. Passing forward precise information to an agent can assist them to search into better choices. A well-trained high-risk life insurance professional can properly evaluate facts and identify a better fit for you.
However, you must recognize that applying to another carrier is only a choice if the reason for refusal (such as diabetes) is one that another carrier may accept (because your diabetes is under control with medication). Because each life insurance company has its own set of underwriting rules, identical applications to various carriers may generate different outcomes.
There may still be possibilities, such as applying to a different business or a different policy type.
If the primary cause of denial is too severe, a new type of life insurance coverage may be the only option. Using “graded” or guaranteed products, those with pre-existing conditions or unfavorable risk profiles can obtain life insurance. While they are more expensive and often provide the highest death benefits, they can be a viable option.
In the Long Run Savings
Keep an eye out during the next several months or years after you’ve been authorized for life insurance. Depending on your circumstances, you may be able to reduce your interest rate. Here are two brief examples:
Allow time to pass. Certain impaired hazards merely necessitate longer time between diagnosis and implementation. As medical records and follow-ups are collected, and symptoms fade or stabilize, your rates may return to normal. Furthermore, questions about a driving record or a criminal background may only require a limited period of time to pass before the offense is either erased or addressed.
Check the workplace. Depending on the scheme, life insurance may be more reasonable if it is provided through group benefits at work. It could also lead to addressing coverage gaps created by a graded or guaranteed policy.
There is no one-size-fits-all treatment plan for declination. Taking these actions, on the other hand, may lessen the stress and annoyances that make finding coverage so difficult.
