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What if your term insurance policy gets declined on medical grounds?

10 Oct 22      |       | ShareShare Share Blog Or copy link Copy Share this link via

Authored by: Anurag Ainapurapu
Reviewed by: Krupa Kenia

The Long Read

Everything you *need to know* about term insurance application being rejected is right above this. Scroll down, only if you'd still like to read more (honestly, why?)

Yes.  

 

When you apply for term insurance, you will have to reveal: 

 

  • Your health status
     

  • Any pre-existing medical conditions
     

  • Lifestyle habits
     

  • Family health history
     

  • Mental health status

 

and so on. 

 

You also have to undergo certain medical tests to help your life insurance company get a clear picture of your health condition. 

 

After assessing this information your insurer can reject your term plan application on medical grounds if you prove to be a high-risk customer. 

 

Know more about medical underwriting in term insurance.

 

Your term plan application may get rejected due to the diagnosis of certain critical or terminal diseases. 

 

If that happens, then it is highly unlikely you will get a term plan. You should take care of yourself and focus on your treatment instead.

 

Remember, this decision will vary from insurer to insurer and will depend on what you have declared in your term plan application form and the results of your medical tests.

First things first, find out the reason behind the application being put on hold from your life insurance company.

 

Then as the next steps, this is what you should do:

 

  • Consult a doctor
     

  • Take steps to improve your health
     

  • Re-apply after the waiting period suggested by your insurer

If your term insurance application gets rejected by one insurer on medical grounds, chances are it will get rejected by others too. So it’s best to discuss the reasons for rejection with your insurer and plan your next steps accordingly.

Yes, there is a chance that your term plan application can get rejected due to your current mental health condition, especially if it is serious. For example, an insurer may reject your application if they find you have a serious nervous disorder or have attempted suicide many times. 

 

Here’s what you can do in such cases: 

 

  • Know the reason behind the application rejection

  • Consult a physician

  • Take steps to improve your health stats

  • Re-apply after the waiting period suggested by your insurer*

 

*Your insurer may want to know from your doctor if you are mentally healthy, at the time of application

Yes they can. If your medical test result shows you have a lot of underlying health conditions such as diabetes, cholesterol or heart diseases, your insurer can increase your term plan premium. 

 

This is called a rate-up in term insurance and it happens when there is too much potential risk involved in offering you a term plan. That’s because you are more likely to pass away unexpectedly from these health conditions than someone who’s not diagnosed with them.

Your term insurer may tell you to undergo the below medical tests to buy term insurance from them: 

  • Urine test

  • Blood tests including CBC

  • Lipid profile

  • Blood pressure

  • Liver and kidney function

  • Fasting blood sugar

  • ECG/TMT/2D Echocardiography

  • Ultrasonography

  • Chest X-RAY

  • HIV

  • Treadmill test
     

Remember, the final list may vary from insurer to insurer. Plus, apart from the aforementioned tests, the insurer may tell you to undergo some more tests if they need a deeper understanding of your health.

You can buy a term plan without medical tests. But we advise you not to because term plans without medicals typically offer lower life covers than term plans with medicals. 
 

A low life cover can mean that your loved ones are not protected adequately, i.e. it may not be enough to support them financially if you pass away. 
 

Further, if your insurer finds out that you have passed away due to an undisclosed pre-existing medical condition, they may reject your term insurance claim. Medical tests can help your nominee claim your life cover without any hassles.

 

Learn whether term plans without medical tests are right for you or not. 

Not necessarily. What matters to the insurer is your personal health profile.
 

You will, of course, have to inform them about any history of chronic ailments in your family because it puts you at a risk of developing these conditions too. 
 

But if your immediate family members suffer from certain diseases (such as diabetes, cancer and/or heart disease), and these diagnoses occurred before they turned 60, then your insurer may tell you to take certain medical tests. 
 

They will also want to know about your: 

  • Own medical conditions, 

  • Age of death of select family members 

  • Any pattern of untimely deaths in your family
     

If these medical conditions that your immediate family members suffer from show up in your test results, only then the insurer may charge you a higher premium.
 

Understand whether family health history affect your term insurance premiums.

When you are applying for a term plan, You have to disclose your family health history to the insurer to help them understand if you are at a higher risk of getting diagnosed with certain medical conditions like diabetes, cancer, or heart diseases. 

 

But despite that, your insurer will be mostly interested to know your personal medical profile to determine the risk associated with insuring you and decide how to move ahead with your application. 

 

They may ask for extra medical tests and more information about your family in case of a family history of chronic illnesses. But you only need to worry, if those medical conditions show up in your tests. 

 

That means, if the insurers assess you to be a healthy and low-risk individual, then chances of your term plan application getting rejected are minimal. 

 

Find out in detail about how family health history affects term insurance.

Your insurer may postpone your term plan application if they come across some red flags in your medical test reports and other health information that you have disclosed to them. That’s because there is still some risk involved in offering you a term plan but not so much that they want to rule out that option entirely.
 

In such a case, your insurer puts your application on hold for a certain waiting period during which you can improve your health stats and reapply.

It depends. As part of your application process you have to take certain medical tests to help your insurer get a clear picture of your current health condition. You also have to reveal the information of your past medical condition to your insurer at the time of term plan application. 
 

Depending on this information, your insurer can take the following actions:
 

  • Approve your application

  • Reject or postpone your application (if there are still some health red flags)

  • Approve your application with an increased premium
     

Remember, whatever you do, do not forget to disclose all past medical conditions to your insurer. Find out more about when can term insurance claim be rejected.

No, not at all. You should never hide your health/medical information from your insurer. 
 

See, if you pass away unexpectedly during your policy duration and your insurer finds out that your cause of death is an underlying medical condition they were not informed about at the time of term plan application, they can reject your death claim.
 

Result? Financial crisis for your loved ones, on top of the pain of losing you suddenly. 
 

It is always better to disclose all medical information and pay a higher premium if required, than risking claim rejection later on. 
 

In the unfortunate case of rejection of your term plan application, you can always try again later after improving your health conditions. 
 

Remember, when it comes to your loved ones’ financial security, you should not take any chances.

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