An ugly little word to hear if you were hoping for a yes.
Or needing a yes.
It’s as if, all of a sudden, you’re blocked from an exclusive club. The cool club that provides financial security for your loved ones. Ugh.
But, you’re not giving up.
Let’s say that you have a friend (that’s us) who knows of a side door entrance to the club. You’re granted access, no problem. OR, what if you see an even cooler club down the street? You realize there’s more than one cool club and breathe a sigh of relief.
Here’s some heart-balm – Even if you’ve been declined life insurance in the past, you can still purchase coverage. You have options.
Rheumatoid arthritis, like many health conditions, is a common cause for a life insurance decline. You’re not alone. It happens all the time.
Grab a pen and note the following important steps to take in order to purchase life insurance, after you’ve been told, “no”.
1. Partner Up
2. Get The Facts
3. Know Your Options
4. Number Crunch
5. Take Action
1. Partner Up
Do this first.
By far, the most important first step is to partner with an expert independent life insurance agent.
Here’s why it’s crucial:
- An independent agent has your best interest at heart and is not held captive to a particular life insurance carrier.
- They have access to the top-rated life insurance companies.
- By shopping around, they are able to find the best policy to fit your needs.
- Not all carriers are created equal, especially with “high risk” applications. (RA is considered “high risk”)
- A decline with one carrier doesn’t necessarily mean a decline with another and you’ll want an agent who can evaluate your options.
2. Get The Facts
Ample information is collected about you when submit your life insurance application. It’s your right to have access to that information. Request to have your data shared with you to better understand why you received a decline.
Carriers decline applications for a number of reasons:
- Medical history – serious medical conditions, like RA, are the most common cause for a life insurance decline. Other serious conditions:
- Multiple Sclerosis
- Parkinson’s disease
- Current exam results – your blood and urine tests provide comprehensive data on your health. Often, especially if you haven’t been to the doctor’s office recently, a surprising “red-flag” result affects your application. Common issues with exam results include:
- Elevated liver enzymes – may indicate damage or inflammation to the cells in your liver. Alcohol abuse, obesity and drug abuse are common causes.
- Elevated cholesterol or triglycerides – places you at a higher risk for heart disease or stroke, especially if you have high LDL and low HDL cholesterol levels.
- Blood or protein in urine – is a possible sign of kidney disease.
- Glucose in urine or blood – can occur in diabetes.
- Driving record – multiple infractions on your driving record, or certainly a DUI, can be a sign of a unsafe behavior and may result in a decline on your application.
- Lifestyle – carriers take note of risky hobbies and lifestyles:
- Scuba diving
- Mounting climbing
- Sky diving
- Drug use or alcohol abuse
- Other – additional reasons an application decline can happen:
- History of bankruptcy
- Criminal record
- Hazardous occupation (i.e. logger, roofer, farmer, fisher)
Important to remember – not all life insurance carriers view risks the same. A decline with one company doesn’t mean you cannot be approved elsewhere.
3. Know Your Options
Polices come in different types and versions. You’ll want to know what’s available to you and what makes the most sense for your needs.
First, there’s generally two types of life insurance:
- Term Life Insurance – provides a benefit in the event of the death of the insured for a specified term (i.e. 10 – 30 years).
- Many opt for term because it’s affordable compared to whole life and provides a benefit when your family would need it most.
- Whole Life Insurance – provides a benefit on the death of the insured and accumulates a cash value.
- Although more expensive, whole life is guaranteed to pay the benefit (as long as you keep up on your premiums) and loans can be secured from the cash value.
Second, there are different versions of life insurance to consider. After you’ve been declined life insurance, consider or reconsider:
- Traditional Life Insurance – first and foremost, it’s important to evaluate whether or not it’s possible for you to qualify for traditional, fully-underwritten (or Simplified Issue, the no exam equivalent) life insurance. Think of this as a best-case scenario:
- Larger benefit amount
- Lower premiums
- No waiting period
- Stricter underwriting
- Mild or moderate rheumatoid arthritis
- Graded Benefit Life Insurance (GBLI) – life insurance made available to those who cannot qualify for Traditional Life Insurance. GBLI is a gift if you have advanced rheumatoid arthritis and cannot qualify for Traditional. Read more on GBLI here. The basics:
- Benefits cap at approximately $50,000
- Waiting period of about 2-3 years for full benefit to pay out
- More expensive than Traditional
- Some health questions asked
- Moderate to advanced rheumatoid arthritis
- Guaranteed Issue Life Insurance (GI) – life insurance for those who are uninsurable (sorry, we know that sounds cruel). In other words, if your health and/or lifestyle prevents you from purchasing other versions of life insurance, you need to consider GI. What you need to know:
- Benefits cap at approximately $25,000
- Waiting period of about 2 years for full benefit to pay out
- More expensive than Traditional and Graded Benefit
- No health questions asked
- Advanced rheumatoid arthritis
- Employee-offered Group Plan – life insurance offered through your employer. If it’s available to you, consider participating in the plan:
- Usually is a type of Guaranteed Issue (no health questions asked)
- Benefits are usually small (often an employee’s annual salary)
- Coverage ends if you leave the job
- Many take part in Employee-offered Group Plan and purchase additional life insurance
Takeaway – there are always life insurance options available to you.
4. Number Crunch
How much life insurance do you need? This is an ambiguous question.
When it comes to financial questions with no definitive answer, there are few more popular than this How much life insurance do you really need? – Rob Berger, Forbes Contributor
Really, the amount you need depends on what you’d like your life insurance to accomplish. And, just as important, you’ll need to consider how much you can qualify for.
Let’s look a some general guidelines experts use to help determine life insurance needs.
Life insurance proceeds can pay for:
- Debts (i.e. personal loans, credit cards, student loans)
- Family business
- Funeral expenses
- Private education
- College tuition
- Household needs (i.e. utilities, landscaping, repairs)
- Living expenses (i.e. food, bills)
Life Happens, a nonprofit life insurance awareness organization, has a nifty calculator you can test out to crunch your numbers. Alternatively, many life insurance agents recommend you take your annual salary and multiply it by 10. However, this is a broad guideline that doesn’t necessarily apply to every situation.
Keep in mind that it’s possible you won’t be able to qualify for the amount of life insurance you want. It happens often. Grab your pen and write this down because it’s super-important: some life insurance is better than none.
5. Take Action
Thinking about life insurance doesn’t provide you coverage. The process isn’t what we’d call fun, but it can certainly be simple and straightforward when you partner with a knowledgeable agent.
We’ll help you find your YES and get access into the “cool club“.
We specialize in working with clients with rheumatoid arthritis find the highest quality protection at the best prices available. If you have RA and are seeking out life insurance, it’s crucial to collaborate with an agent with a deep understanding of RA. At Rheumatoid Arthritis Life Insurance, our job is to be your advocate. As an independent life insurance agency, we will cross-reference the top-rated life insurance companies to find the best rate for which you can be approved.
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