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What Should I Do If I Am Uninsurable?

2011 June 20

This is certainly a difficult situation to deal with, especially if you have family that depends on your income. First and foremost, make sure you are truly uninsurable. Just because you have been declined by one company does not mean that there are not others out there that may consider your application. The advantage of working with an independent agent – like Zander –  is that we have numerous companies that we represent and can shop to find the best alternatives available. We work with companies that specialize in higher risk individuals and can usually help when other companies or agents cannot.

If there are issues that make acquiring term life insurance impossible at this time, there are certain steps to follow that may help. Contact your employer and see if there are any opportunities to purchase more protection through your group plan. Many times, employers offer buy up or voluntary plans that do not require any medical review. Associations that you belong to may also offer some life benefits to their members without medical qualifications. These types of plans are usually more expensive than an individual policy, but at this point, just getting access is more important.

There are also “guaranteed issue” type plans that are offered by specialty companies and associations such as Colonial Penn and the AARP. These are small cash-value type plans which Dave Ramsey does not typically recommend; however, in this situation, the protection for your family is more important than the type of plan. You can piece together several of these smaller policies to try and get some level of protection for your family’s needs. On that same wavelength, there is also the option of purchasing an accidental death policy. While this type of policy is also not generally recommended by Dave Ramsey, and payouts on are infrequent (since, as we age, our risk of dying by accident goes down), it is a tool that someone who is uninsurable could use to help supplement the other options noted above, providing an additional level of protection for your loved ones.

Remember that just because you may be uninsurable today does not mean that this situation is forever.  Many situations that may limit your ability to buy life insurance now actually improve as more time has passed since the last recurrence. Revisit the process of reviewing options every year or so, depending on the nature of the situation, since your eligibility and the pricing may improve each year.

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