Life is filled with milestones that mark stages of maturity. Taking your first steps, walking to the store alone, first time shaving -- chin or elsewhere, according to gender -- and of course, coming of age at 21. One of the less-touted marks of maturity is the day you take out a life insurance policy to protect your family in case of your death. It's a moment few look forward to, but sooner or later you have to step up and be responsible. That's why it's especially deflating to be declined for insurance coverage.
If your application for coverage is declined, the first thing to do is find out why. Don't assume you're uninsurable, it just means that one specific company chose not to offer you coverage. If your work takes you to dangerously unstable countries, for example, or if you're in an unusually risky line of business, some companies will be reluctant to cover you. The same holds true if you're a skydiver, mountain climber or scuba enthusiast. These issues don't relate to your health, but any one of them can cause insurers to walk away. This is especially true of low-cost providers, who can't turn a profit with high-risk policies.
Sometimes, you'll be turned down because of health or medical reasons. If you've had a life-threatening illness such as cancer, or suffer from a chronic illness such as cystic fibrosis, getting coverage will be a challenge. The same is true if your family history includes high rates of fatal illnesses. Other conditions, including obesity, smoking or the after-effects of an illness, are easier to work with. You can re-apply after addressing the underlying cause by losing weight, quitting smoking or making a full recovery.
Finding the Right Company
In most cases, even if you represent a substandard risk, many companies will offer you coverage. The premiums will be higher than with a standard policy, and the coverage may be lower, but it's still a competitive market. Seek out a broker who specializes in higher-risk policies. Compare the premiums and available options. Expect to have to complete a full medical examination to get the coverage you need. If your health situation improves, or if you stop participating in high-risk activities, you should eventually be able to bring your rates down to normal or near-normal levels.
If you aren't able to get conventional coverage even from the more flexible companies, you'll need to look for alternatives. Group coverage is one possibility. Groups rely less on individual underwriting, since risky clients are balanced out by healthy ones. When you're interviewing with potential employers, ask about their plan. If you haven't got insurance through work, your alumni association or professional body might have a plan you can join. Most offer a base amount of coverage, which can be increased with little or no underwriting. In a worst-case scenario, many companies offer "guaranteed issue" products which offer limited coverage and high premiums, but are available to anyone.
Fred Decker is a trained chef and certified food-safety trainer. Decker wrote for the Saint John, New Brunswick Telegraph-Journal, and has been published in Canada's Hospitality and Foodservice magazine. He's held positions selling computers, insurance and mutual funds, and was educated at Memorial University of Newfoundland and the Northern Alberta Institute of Technology.