Overcoming Life Insurance Eligibility Issues

In Part One of our special handling series, we focused on the key roles prequalification and underwriting play in helping people buy the policy that best meets their needs. Now we turn our attention to additional eligibility requirements and the challenges beyond the mortality assessment that could affect your eligibility for life insurance coverage.

Hurdles on the Path of Underwriting

While mortality risk is a key factor in determining your insurability, it’s not the only obstacle that can prevent you from purchasing a life insurance policy or obtaining an affordable price for your coverage.

What Does Underwriting Involve?

Underwriting is the process by which insurance companies figure out how risky you are to insure and how likely your beneficiaries are to collect the death benefit. Underwriting is probably the most comprehensive vetting process required for the purchase of any financial product. In order to make this decision properly, companies use various methods of investigating the risks you pose, such as:

  • Written life insurance application
  • Phone interview
  • Medical record review
  • Medical exam
  • Financial credit survey
  • Motor vehicle report
  • Insurance application history
  • Prescription medication history

Underwriting Complications

With that much information on the table, it’s easy to see how complications can arise. Here are some examples of things that can cause problems in underwriting:

  • If English is your second language, can the phone interview be conducted in your primary language?
  • What happens if your medical records are missing or misleading?
  • How can you be effectively underwritten if you haven't seen a doctor in years?
  • How will you undergo the medical exam if you have a fear of needles?
  • Perhaps your history of insurance applications shows a number of declinations and ratings. What has to be done to prevent these from being held against you?
  • Maybe you'll be in the state or country of the sale for a short amount of time. How can your itinerary be accommodated?

Business Concerns

As if all of the above obstacles were not enough, still other challenges relate to the administrative or business end of your purchase. Both your ability to pay and the financial justification of the face amount of the policy based on your income and assets are valid business concerns.

Additionally, you may want atypical designations for your owner and beneficiary that challenge the premise of insurable interest. Maybe you want to insure somebody without their knowledge, in a case of exceptional hardship. Or, you intend to sell your policy to a third-party once it is in effect.


All of these factors require special handling. This is why being “high risk” is only part of the challenge. Someone may pose a comparatively low mortality risk but still have trouble getting a policy due to special needs in underwriting or business qualification.

Special Needs In Insurance Purchases

This is why I prefer the term “special needs” for folks that might have trouble buying a policy.

Here is a summary of the types of cases that would require special handling:

  • Addictions: recreational drugs, prescription drugs, gambling, alcohol, sex (For more from this author, see: The Blunt Truth About Marijuana and Life Insurance.)
  • Application history: declined or rated on prior applications
  • Citizenship/residency: Non-U.S. citizen, temporary U.S. resident, foreign resident with business or financial ties in the U.S., U.S. citizen living or traveling abroad
  • Criminal record: charges, convictions, time served, probation
  • Face amount: extraordinarily high face amount, multiple policies, multiple carriers
  • Financial record: bankruptcies, liens
  • Health issues: everything from the neurological to the psychological, from immune system deficiencies to build and weight
  • Hobbies: mountain climbing, scuba diving, parachuting, extreme sports and other adventurous pursuits
  • Medical exam issues: aversion to needles, difficulty drawing blood
  • Medical records issues: no current records available, inconsistencies and inaccuracies in medical records
  • Motor vehicle record: excessive points, license suspensions, DWI history
  • Occupation: higher-risk job duties, environment, workplace
  • Owner/beneficiary designations: charitable giving, corporate-owned, trust-owned, third-party involvement
  • Travel: job-related, leisure, missionary work

Find Your Advocate

If you find yourself discouraged after reading through all the potential challenges that could arise in your pursuit of purchasing life insurance, don’t be. The special needs that might be present require special handling by a life insurance expert who will go to bat for you, walking you through the process and finding ways to deal with the hurdles as they arise. (For more from this author, see: The Role of a Life Insurance Super Specialist.)