DECLINED: One of the most dreaded words to come from your financial or insurance advisor. There are many reasons that could lead to a decline on your application. Financial issues (past bankruptcy), health issues (past or present), family history, citizenship status, etc. Unfortunately, it leaves many applicants with a feeling of loss, frustration, and often, a sense of helplessness.
For most advisors, this is where the options stop being presented to the client. Don't despair: YOU STILL HAVE OPTIONS!
A number of different insurance companies have focused on insuring these types of clients. This type of insurance is referred to as Simplified Issue and/or Non-Medical Life Insurance. It gives the feeling of power back to the client in terms of having some options, even if it's not their "best-case scenario" option.
Here is an example to consider: a 47 year old female, breast-cancer survivor. Most insurance companies will decline her outright due to her medical history, or rate her highly, thus dramatically increasing her cost of insurance. Enter the Simplified Issue insurance company.
By applying for a Simplified Issue or a Non-Medical Life Insurance option, this client could be insured for up to $500,000 of life insurance if she has been clear of treatments for as little as 3 years. Also, if an illness (cancer or other) was diagnosed as terminal after having been approved, 75% of the face-value would be paid out as a living benefit (the death benefit would subsequently decrease by the amount paid out).
Another example might be for new business owners who have come into a partnership, or a multiple owner situation. Many insurance companies want to see at least 6 months worth of financials before approving anyone for life insurance. The reason for this is to appease the directions in their partnership agreement, or their Unanimous Shareholders Agreement. With simplified issue insurance, there are no financial questions asked, and coverage can take almost immediately. This can also be a solution for business owners who have an insurable need, but are historically uninsurable.
Even if you have been declined for a serious medical condition, or even on your death bed, you can receive coverage at a minimum of $25,000.00. However, there is a stipulation: the full death benefit would only be paid out if you survive for 2 years after the application. If you happen to pass away within the first year (from non accidental causes) then your premiums would be returned, plus 3% interest. If a death occurs in the 2nd year, then 50% of the face value pays out. With all off this in mind, basically, anyone can get life insurance and at a low risk.
In closing, if you have ever been told you can't get life insurance for any reason, or know a friend or family member who has been declined or just didn't think they would qualify for life insurance, you now know that there are options. To explore what kinds of insurance options are available to you, and for a better idea on how you can protect yourself and your family, feel free to contact me via email at chris@oaktreews.ca or via telephone at (780) 966-5084.