It’s not incredibly uncommon, when applying for maximum life insurance coverage, to get approved other than applied. This means you applied at one rate, but got something different instead.
It could have been a better rate, but usually it’s the other way around and the policy you applied for comes with a different sticker price.
What are your options now?
Follow along below for several different scenarios with several options you have at still getting covered without breaking the budget. Some may find that they need a policy with no medical exam required, if you fall into this category, learn more on how you can obtain a million dollar insurance policy or term life insurance with no exam. There are also companies who offer declining term life insurance. Let us help you in your search and help you get the coverage you deserve.
Getting Approved Other Than Applied
It can be a little disappointing getting approved other than applied because it means having to change plans, and let’s face it, nobody likes change. But with life insurance, there are a lot of different ways to to break down a policy, and many ways to accommodate your approval rating so you stick to your budget.
Here are a few different ways you can modify your policy, even after you’ve been approved, in order to protect what you intended in the first place:
- Change Carriers
- Change Policy Types
- Change The Coverage Amount
- Change The Duration
- Change Payment Structures
While not all of these will apply to each scenario, keep in mind that each one provides a different benefit, so be understand what you’re giving up before you modify a certain piece of your insurance plan.
Sometimes it’s not you, it’s the carrier. Sound like an old dating denial? Well this one has some merit, because not all carriers accept the same people for the same things. While company A might be happy to insure someone who smokes just a few cigars a year with a non-smoker rate, another might scoff at the idea.
Simply swapping out one carrier for another could help. Just make sure the agent you’re working with (which better be an independent agent or you’ll be shopping for a new agent, as well) understand exactly why you were rated down, and this will aid him in finding the most appropriate carrier so you get what you want the next time around.
Changing Policy Types
Perhaps you applied for a more permanent policy, like a universal life insurance or whole life insurance plan, but you weren’t accepted at the rate you thought you would be. If this is the case, and you still require the same amount of death benefit, switching to a term policy for now might allow you to keep your coverage for a shorter duration at a better price.
Change The Coverage Amount
Maybe you applied for $500,000 in death benefit, yet the new rating puts it out of budget for you. Scaling back to a lower amount may be beneficial, but it may also be counterproductive. Consider:
- How much coverage you need to really protect yourself properly
- Price bands/breaks might actually make a smaller amount more expensive
Change the Duration
Probably one of the easier things to do is modify the duration. Let’s say you started with a 30-year term. Dropping the duration down to 20 or 25 years may be enough to get you back in the ballpark of where you started when you applied.
This works especially well if there’s an improvement that can be made to lower your rates. For example, loss of weight, which will lower your BMI while looking for life insurance coverage, to earn an extra discounted premium, a change in health for the better which could bump you up a table rating or two, or you have the possibility of quitting smoking or other activities which boost premiums automatically.
Change Payment Structures
This one may not take a huge chunk off the bill, but if none of the above work, you might try to pay annually. This tends to lend you an extra 5-7% discount from the monthly or quarterly fees, making it just a tad more affordable.
Some carriers even allow you to pay with credit cards, so if your credit card company gives you cash back or points, you can double this on top of the annual premium payment discount.
There are many different ways to modify your arrangement with the carrier to lower your policy premiums back to where you had originally planned, but if you’re declined altogether, you may need to completely rethink or rebudget to get to where you want to be.
If you have questions or have been approved other than applied by another carrier already, we’ll be glad to help you make adjustments or find a new plan.