What is the Appeal Process When Turned Down For Life Insurance?

[RWeeks]

What is the name of your state? VA

I was recently turned down for a life insurance policy offered through my employer’s benefits package. Their decision was based upon answers to the questions on the form. I asked them if I could take a physical so that they could make a more informed decision and they did not feel that it was necessary. What do I need to do to appeal this decision?

Here is some background information that may assist whoever is going give me some advice. Approximately three years ago I was diagnosed as a Type II Diabetic. The doctors advised me that they thought it was likely brought on by my obesity. In the past year and a half I have lost a considerable amount of weight through a combination of diet and exercise.

At no point since the diagnosis (Aug 01) have I had to use medication to control my diabetes. I have always controlled it through diet and exercise. While reviewing the results of my last physical (Feb 04) the doctor told me he thought that the results of the blood tests that led to the diagnosis may have been because of my obesity and not because I am a diabetic. I am inclined to agree with him as my family has no history of the disease. I am open to your advice on what I need to do to proceed.

Sincerely

Ray W

 

[JETX]

Simple answer..... there is NO statutory obligation for a business (including insurance companies) to have to do business with you. Your option is to take your business elsewhere.

 

[cbg]

It is HIGHLY unusual for an individual to be turned down for group life insurance. You say that this insurance is part of the package offered by your employer? Did you apply for it when you FIRST became eligible for benefits through this employer, or did you not apply till later? It makes a BIG difference to my answer.

Also, who pays for the benefit; you, your employer, or both of you? Again, it makes a big difference.

 

[RWeeks]

I understand that there is no obligation for them to do business with me. I was told by them that I could appeal through the underwriters, what I was looking for was a general format that I could use for the letter.

Simple answer..... there is NO statutory obligation for a business (including insurance companies) to have to do business with you. Your option is to take your business elsewhere.

 

[RWeeks]

Thanks for the help. Yes I applied for the insurance when I first became eligible for benefits through my employer. As I understand it I am covered up to $50K. A year or so later, I saw a financial advisor about my financial situation. One of the topics discussed was life insurance. He advised me to increase the value of my policy to a higher amount to insure an adequate income for my spouse if I were to die. He thought that it would be cheaper for me to get the insurance through work rather than through an agent. This additional coverage is what they turned down.

The benefits are paid for by both my employer and me. The base coverage of $50K is paid for by the company; any additional coverage would be paid for by me. I understand that it is their prerogative to insure me or not. However, I would prefer that the decision to turn me down was based on medical facts rather than a cursory look at some questions on a form.

It is HIGHLY unusual for an individual to be turned down for group life insurance. You say that this insurance is part of the package offered by your employer? Did you apply for it when you FIRST became eligible for benefits through this employer, or did you not apply till later? It makes a BIG difference to my answer.

Also, who pays for the benefit; you, your employer, or both of you? Again, it makes a big difference.

 

[terry32561]

Start with your family doctor

You cannot appeal to an underwriter until you have proper documentation from your Doctor that you have the lost the weight and have kept it off, normally for at least 12 months and that your diabetes is controlled by diet. If there are no other contributing factors (hbp, heart problems, high cholestrol) and you are perfectly healthy then there shouldn't be a problem after your Doctor's records are straightened out. Also try an independent agent, yes it may cost more for the insurance but you won't lose it when you leave your job.

 

[ALawyer]

You were given good advice.

Most underwriting on OPTIONAL group insurance is done on a Yes / No basis based on very simplified underwriting -- usually based on responses to a few questions -- with little gradation. The first $50k is the maximum amount an employer can provide without it being taxable to the employee -- beyond that there is imputed income.

Individual insurance is issued and priced based on an evaluation of YOUR personal risk characteristics. Your characteristics are fit into a rating class -- super preferred in some cases, preferred in others, standard in others, and "rated" in others -- and there a huge numbers of ratings -- each grade down carrying a higher pricetag. If there appear to be small to moderate risk factors -- and there are in your case, at least now -- you can still get coverage but at a higher price than a person in perfect health.

Not all companies view the same factors identically, especially if lower amounts of insurance are sought (often at up to $250k -- where many "smaller" life insurance companies begin to get outside reinsurance). BUT shopping around on your own is potentially dangerous as you are not sure where to shop - in other words you don't know if Company A is ultra-strict and ultra-conservative on weight and diabetes and if you apply to Company A and Company A were to rate you highly (expensively) or reject you, the underwriters at B are less likely to be courageous.

An EXERIENCED independent life insurance broker is the way to go. ALSO, if the policy is large enough, what they may be able to do is rate you "standard" with a temporary extra premium until they are convinced your low weight and lack of diabetes is likely to be premanent. If not, you can shop for a new policy yourself several years down the road when you don't have the recent weight / diagnosis problem on your head.