The one crappy thing about getting older is more family and friends in your network start to get ill and pass away. I’m still relatively young, but many people in my circle of family and friends are getting up there in years. The only person I know of in my family who lived super long was my great grandmother who was in her upper 90s when she passed. I clearly remember meeting her when I was little, which is pretty remarkable.
Life is precious
Anyway, just this past week I found out one of my distant aunts passed away in NY. She never married or had children. Just a day or two later I found out one of my chorus friends was diagnosed with stage 4 lung cancer, completely out of the blue. And three of my other chorus friends lost their fathers to cancer over the last three weeks.
Naturally, these events make me think about my own mortality. I certainly hope I can stay healthy and live a long and happy life. But so much about death is simply out of our hands – when it happens, if we get into an accident, if we inherited genetic issues, if we get sick for unknown reasons, etc.
Take control of everything you can
So we really do owe it to ourselves and our loved ones to control everything that we can to improve our longevity – eating healthy, exercising, reducing stress, being emotionally present with our families, avoiding high risk situations. On top of that being financially responsible and having insurance are key.
I’m grateful that I have good health insurance and a term life insurance policy that lasts another 28 years. I opened my own life insurance policy after I left my full-time job in 2014 because I lost my free life insurance coverage benefits from work. I had wanted a bigger policy for a while anyway, so leaving my job was the perfect incentive for me to get one of my own.
Many people who want life insurance are fearful they can’t afford it or won’t get approved. But the good news is there are many affordable options that fit each of our unique situations. If you’re thinking about opening a policy, it’s helpful to know the many benefits of life insurance and what can cause higher premiums and denials before you apply.
What causes life insurance denials and high premiums?
Alcohol and tobacco. Smoking is seriously toxic to our bodies and kills over 480,000 people a year, or 1,300 people every single day. I’m strongly against tobacco use because it gave both my dad and grandfather cancer. I’ve never taken one puff my entire life and stay as far away from it as I can. Tobacco and alcohol use can cause higher life insurance premiums because of side effects. Long-term alcohol use can cause liver disease along with cardiovascular, neurological and psychiatric problems.
Drug use. Applying for life insurance requires full disclosure of all legal and illegal drug use. This includes any prescription medications you’re taking, which can affect rates depending on what conditions are being treated. Medical marijuana doesn’t result in immediate denial from all life insurance companies, but could result in higher premiums. Pretty much any other illegal drug will result in a rejected application.
Pre-existing conditions. The healthier you are, the better your rates are likely to be based on your age. Obviously young people in excellent health are a lot less likely to die prematurely than people who are older and/or in poor health. Having a pre-existing condition doesn’t necessarily mean you can’t get life insurance, but you’ll probably have to pay higher premiums. Keep in mind some insurance companies are more lenient than others, so don’t be afraid to shop around. Examples of pre-existing conditions that can increase rates or possibly result in an application denial are listed below.
- Obesity
- High cholesterol
- High blood pressure
- Diabetes
- Heart disease
- Epilepsy
- Cancer
- Recent hospitalization
Dangerous activities. Even if you’re young and healthy, if you are active in high-risk sports or hobbies you might have to pay a higher premium for life insurance. Examples include:
- Skydiving
- Racing
- Scuba diving
- Rock climbing
- Bungee jumping
- Aviation
- Heli-skiing
- Boxing
- Cliff diving
The more active you are in high risk activities that are prone to serious injuries, the more likely you will have to pay a higher premium.
High risk travel. Going on vacation to well established countries like Japan or France for vacation likely won’t impact your life insurance application. But frequent travelers who visit high risk countries can face higher rates or possibly denial of coverage due to the likelihood of contracting diseases or getting injured.
Traffic violations. Applicants who have a lot of accidents and traffic violations within the last five years on their driving record are unlikely to qualify for the lowest rates. Typically, applicants with more than 2 DUIs within the last 10 years are declined. You owe it to yourself, your loved ones and everyone on the road to be a safe driver.
Sick parents who died young. If your parents passed away due to old age before you apply for life insurance, you shouldn’t face an increase in premiums. But if you lost a parent to poor health before he/she was ~65, you might not get the best rates. Life insurance companies often charge an applicant a higher premium if they believe he/she is at higher risk of suffering a similar illness.
Lying on your application. If you’re tempted to lie or withhold information on your life insurance application, it could wind up costing you and your beneficiaries dearly. Don’t forget you have to pass a health screening exam before you’re approved and life insurance companies can access your health records during the underwriting process. They can also find out if you’ve ever been denied for a life insurance policy before. Plus, depending on the materiality of your application’s misstatement, your insurance company could refuse to pay any at all money to your beneficiaries if you die.
Criminal record. Applicants with multiple felonies are unlikely to get approved for life insurance. Factors that insurance companies consider when determining rates and whether to approve or reject an application include when you were convicted and why.
Bankruptcy and income limitations. Applicants who filed for bankruptcy within the last 12 months generally won’t get approved for life insurance. You could also get denied if your income level is too low or if you’re applying for a policy that’s too large based on your annual income. An agent can help you determine a policy size that’s well suited for your particular situation.
Hazardous work. If you have a dangerous job, it can make it harder to get a life insurance policy but that doesn’t mean it’s impossible. Some examples of high-risk jobs include airline pilots, loggers, deep sea fishing, steel workers, and electrical power-line installers.
The bottom line is, if you have a dangerous job, high-risk lifestyle, or aren’t in great health, you’ll likely face higher life insurance premiums or potentially be unable to get coverage. Talking to a life insurance agent about your unique situation can help you figure out your best way forward.
When to consider getting life insurance
If you don’t have life insurance, in addition to understanding what causes higher premiums and denials, it’s beneficial to understand if you actually need it or not. If you meet any of the below criteria, you may want to consider getting a policy.
- Married, engaged or in a serious long-term relationship with mutual financial obligations.
- Have kids or plan to start a family.
- Support your parents or other dependents.
- Want to help replace lost income to cover living expenses, education and emergencies for your loved ones if you pass.
- Have mortgage debt, sizeable student loans, medical bills or other debt greater than your assets.
- Own assets that you want to protect for your heirs.
- Desire a tax-free death benefit for your beneficiaries.
- Lack the funds to pay for burial costs (roughly $15,000 – $30,000) or other final expenses.
- Own a small business in which you play a major role.
Where to get help finding a life insurance policy
One thing I’ve learned from my experience shopping for health insurance is there’s a huge advantage working with an agent. Any kind of insurance shopping can feel pretty overwhelming because there are so many providers and so many different plans within each company.
Working with a life insurance agent can really help you determine how large a policy to get (ex. $350,000 vs $500,000 vs $1,000,000, etc.), how long of a term (10 years, 15 years, 30 years, etc.) and with which provider.
If you don’t already have a life insurance agent, SelectQuote is a fantastic place to start. They’ve been in the term life insurance business for over 30 years and are the #1 sales agency in the U.S. Here are some benefits of using a SelectQuote agent to find a life insurance policy that works best for you.
- Quotes are always free.
- Expertise finding the lowest cost life insurance options.
- Unbiased price comparisons.
- Access to the best rates from highly-rated providers.
- Streamlined application process.
- Provide everything you need to make an informed decision.
- Personalized answers to all of your questions.
- Lobby on your behalf to keep pricing fair.
- Go to bat for you every step of the way.
- Auto, home and senior care insurance is also available.
At the end of the day, a life insurance policy can help you and your family sleep easier at night. It’s a pretty priceless feeling knowing that your family will be taken care of if anything should happen to you. I definitely sleep better at night knowing I have life insurance for my family.
*This article was sponsored by SelectQuote, but all thoughts and opinions are my own.
Untemplaters, do you currently have a life insurance policy? Did you work with an agent or go directly to a provider? Were you familiar with all the causes of higher premiums and denials of life insurance before reading this post?
Thank you so much for writing this post, Sydney. It makes me think about how I used to think that I was invincible because I was so young but your post inspired me to do my annual physical check up and that I’ve been post poning for so long. My friend’s dad recently got diagnosed with cancer and thank god that they found the culprit early that he’s fine now. If he had been a month or two late, there wouldn’t have been much time left.
Health is a scary topic..
That’s great to hear you went to get your physical! It’s unfortunate that we tend to run into more health issues as we age, but if we stay on top of preventative screenings and take care of our bodies we can really add years to our lifespan. That’s fortunate your friend’s dad is better now. Early detection makes a huge difference with cancer.
Some things to add, always go for term not whole life. The rates are infinitely cheaper and when you get over the age if your doing things right you should be able to self insure. I would not count on an employer policy unless you’ve investigated if you need a health checkup to continue if you leave the employer. You don’t want to leave the employer for health thus losing your life insurance. Finally watch the amounts in an employer plan. Over 50k in employer life insurance is taxable as imputed income.
Great input FTF, thanks! Agree that whole life is super expensive and not the best fit for most people. Great advice on checking on the health exam if one has to leave work due to an illness and wants to continue the employer plan.
Right now I only have life insurance through my work. It’s not a huge policy but it’s better than nothing. I had no idea there were so many reasons that can affect rates and whether or not you actually can get approved for a policy. Makes a lot of sense now after reading your post though!
I do like the idea of working with an agent to get help finding a policy that works best based on my situation. Insurance seems so intimidating to buy so I’m glad to hear there are low cost options and easy ways to get help.
That’s good to hear you have coverage through your employer. I think a lot of people don’t realize the added value life insurance benefits provide. I definitely under appreciated having coverage through my employer for many years. I was also lucky because they paid for the full premium.
FYI – About 55-60 percent of U.S. non-government workers have access to life insurance benefits at work on average. If you look specifically at union workers and those in state and local government jobs, the access percentages rise closer to 80-85 percent! Participation rates are very high across the board for workers that have access to employer sponsored plans.
I recently reviewed my life insurance and realized I’ve only got 7 years left. When thinking of getting more they told me I have to go through the whole physical checkup again. Bummer! I decided to just keep my policy and renew when the time comes.
I really like having life insurance for my loved ones. Tax free, pretty inexpensive, and makes me feel happy to GIVE something in case of my death. That’s a win, in a bad situation!
Thanks for writing this post!
Sam
Yeah that’s a bummer they require the physical exam all over again. I get why insurance companies require that but it sure would be nice if it was super easy to just extend it out for another X amount of years for the same rate.
It’s good you have a policy now though. I haven’t met anyone who regrets having gone through the process to get a life insurance policy. Definitely provides a lot of peace of mind.