Broker Check

Understand why you got declined or rated for Life Insurance

| January 11, 2023



      Have you ever applied for life insurance and been declined or rated by the insurance company? Unless you’re in the insurance industry, you probably have no idea why or how. Something in your health or lifestyle is causing the insurance company to consider you uninsurable, or they will offer you coverage at a higher rate. But how do they come to this conclusion? 

     The MIB report, formally known as the Medical Information Bureau, is an electronic coded database that includes dates of life insurance applications, dates of diagnoses or treatment for illnesses, medical conditions, types of treatment, and where the medical history came from. One of the ways for the MIB to be updated is from the APS (Annual Physician Statement) from your doctor. Both the MIB report and APS are very important. This written information is required by the insurance carriers and play an important factor in determining your insurability, regardless of how your doctor has coveyed the message to you during your visit. 

     Not just your personal health plays a role in your insurance. Your family’s health history is also taken into account when determining if you’re eligible for life insurance. The carriers are looking for longevity, hereditary diseases, and causes for early deaths.  

     What you do for a living and what you do for fun can make you uninsurable depending on the level or degree of risks and danger is involved in what you are doing. For instance, if you’re someone who parachutes out of planes or works on powerlines, you pose a higher risk of an earlier than average benefit payout to the insurance company than someone who never is in a harness while they are in the air. For these reasons someone who has a high-risk hobby or job will most likely have a higher premium or even be declined. They may also offer you a policy with an exclusion. That exclusion will most likely state that if the insured was to die from the high-risk hobby or job, then the insurance company wouldn’t pay out.  

     Life insurance health ratings take so much information into account, as we learned sometimes it has to do with family history. The most important factor in your health rating is your current health status, not how you feel, but the medical facts. You will most likely have to answer medical questions and in some cases, complete a physical medical examination. I say you should always get life insurance sooner than later because we’ve had clients find out they had health related issues after completing their exam for life insurance. 

It’s never too early for life insurance.