What should a person do if they were declined for life insurance?

If you agree with the idea that you need life insurance but, for some reason, cannot obtain it, let’s look at the reasons why insurers might decline coverage.

Although many people assume that a decline is simply due to health and that’s the end of the story, in reality this is not always true: there can be several reasons.

Any type of insurance (life, auto, cargo, etc.) is first and foremost based on statistics: how often the insured event occurs among people with similar characteristics.

Based on this, insurers decide whether to offer coverage and at what price.

This is my explanation of insurance after many years of experience in the life‑insurance industry (we have insured several thousand clients across life, critical illness, disability, travel, Visitors to Canada, and other personal insurance products).

Why life insurance can be declined

Insurers assess your risk based on health, lifestyle, smoking status, occupation, hobbies, medical history, and many other criteria, including your status in Canada. In Canada it is fully legal for a company to decline coverage if it considers your profile too risky.

What is “high‑risk” from the insurer’s point of view? Here lies an interesting nuance: what is risky for one insurance company may pose no particular risk for another, because their data and statistics differ. For example, if an insurer (hypothetically) only insures men, it may be very hesitant to insure a woman because it has no internal statistics for women.

If an insurer mainly insures perfectly healthy people, it may not be able to accept applicants with chronic conditions simply because it lacks internal statistics.

It is clear that insurers do not rely only on their own company data, but if an underwriter has approved three similar cases and all three ended in claims despite a seemingly low risk, the insurer may not want to experiment a fourth time when a similar client appears. At the same time, industry‑wide statistics may still show that the risk is low and that coverage is appropriate.

Common reasons for declines

-Chronic conditions – cardiovascular disease, diabetes, high blood pressure, cancer, kidney or liver disease, mental health conditions, and others.

-Recent serious diagnoses or surgeries – heart attack, stroke, heart surgery, cancer, major surgical procedures. In these cases insurers often either decline coverage or offer high‑risk pricing, postponement, or more expensive terms.

-Harmful habits – heavy smoking, alcohol abuse, drug use, confirmed by medical records or test results.

-Occupation and hobbies – working in mines or at height, firefighting, piloting, diving, extreme sports – all increase the risk rating.

-Recent negative decisions from other insurers – if you have already been declined by one company, this information may be available to others through shared databases, which can complicate future applications.

-Legal status in Canada – some insurers do not want to provide life insurance if the applicant is not a Canadian permanent resident or citizen.

-Ongoing diagnosis or incomplete treatment (i.e. diagnosis is still in progress or treatment has not been completed).

-Suicidal thoughts or visits to a psychologist/psychiatrist.

-Recent bankruptcy.

-Dangerous driving.

-Height‑to‑weight ratio.

 

Now let’s look at some of these reasons and see what can be done about them.

First steps after a decline

First of all, you should find out the exact reason for the decline.

Many people receive a decline but never understand the precise reason. Sometimes (and often) the agent mumbles something and the client leaves confused. Although agents sometimes cannot obtain the exact reason due to confidentiality, this usually boils down to medical factors. If the declination is due to non‑medical reasons, for example that the applicant is not yet a PR or has a high‑risk hobby, the insurer will notify the agent; this is not confidential information for them. If the reason is strictly medical or related to harmful habits (alcoholism, heavy drinking), the insurer may not tell the client or the agent directly, but it can easily write the reason to the family doctor. At least in our practice, we have never had any difficulty requesting the reason for a decline and sending it to the family doctor when the insurer refused coverage.

Knowing the exact reason is the key to understanding whether there is a chance of reconsideration, postponement, or applying with another company.

When an insurance agent knows the reason for the decline, it becomes much easier to work with the case. The reason is not always related to health; sometimes it may even be due to an error (for example, the doctor responding to the insurer’s request provided incorrect information). Quite often an insurer only postpones the decision (but still calls it a decline, since every application must be either approved or closed as declined – there is no third option) if some medical tests or diagnostics are incomplete or treatment has not yet finished. In such cases, you simply need to complete all tests and treatment and then continue with the same application.

If the wording in the decline letter does not match reality, you can discuss this with your doctor and ask for an updated medical certificate; through your agent you can then submit an appeal to underwriting, attaching up‑to‑date medical documents with explanations.

Never, under any circumstances, hide information from the insurer. The entire meaning of an insurance policy disappears when the truth comes to light (and this usually happens after the insured person has passed away). In Canada, life insurance is a contract where you are obliged to be honest. If it is later discovered that you hid information, the company may refuse to pay out in the event of a claim, and this does not even have to be related to the cause of death: you could die from a harmless brick falling on your head, and still be denied because you concealed information on the medical questionnaire.

If the reason for the decline is temporary and can be resolved with the same insurer, there is usually no sense in applying elsewhere; continue with the same company.

What to do if the decline is final

Many people, after receiving a decline, say: “I’ll tell them off, I’ll punish the insurer by not doing insurance with them.” But the insurer’s life will not change no matter how many people grind their teeth against it (interestingly, if you do get insurance, you actually want the insurer to provide coverage mainly to healthy people and not accept everyone indiscriminately – the price depends on the number of claims, and the more unhealthy people and, therefore, more claims there are, the more expensive insurance becomes for healthy people).

Life insurance is not for you; it is for your loved ones. Do not punish them by refusing insurance!

What options are there? If the reason for the decline is known, there are several ways to still obtain coverage.

As we described above, different insurers assess risk differently, and a decline from one insurer does not mean a decline from another. You can make a preliminary inquiry with another insurer and ask whether they would consider the application.

There are also insurance companies or special life‑insurance products designed for people with higher risk. These will usually be more expensive than standard life insurance, and may have special conditions (for example, if the insured person dies within the first two years after the policy starts, the insurer may only refund the premiums paid).

Nevertheless, in most cases, life insurance can still be found; it is often just a matter of price, not of “they give or they don’t.”

The higher the risk, from the insurer’s point of view, the more expensive the insurance. Also, the insurer always assumes that the insured’s condition will at least not worsen but may improve from the worst‑case scenario it uses for pricing. If the client’s situation improves over time or a significant period has passed since the original decline (for example, someone had cancer and five years have passed), the insurer may reconsider the decision.

Moreover, it is not always the case that the applicant is fully refused. Often coverage is offered but either with exclusions (for example, “if death occurs due to heart failure, we will not pay”) or at a higher price. These conditions can often be reviewed in the future if several years have passed and the person’s health has at least remained the same.

Many people may find it interesting that if someone is declined for term life insurance, the same insurer may still approve a permanent life‑insurance policy.

Alternatives to traditional life insurance

Sometimes people do not want to go through the standard life‑insurance application process. This is often due to health, but sometimes it is simply because the process can seem tedious, complex, and long. You have to remember all your past illnesses, describe them, recall which doctors you saw, and what procedures you underwent.

Sometimes people want to obtain insurance quickly, without an extensive process, especially since some standard insurers may also request medical tests, and not everyone likes to give blood even to save money. In such cases, there is a simplified option.

This is insurance without a mandatory medical exam but with a short health questionnaire. You answer a few yes/no questions, and based on your answers, you are either accepted, offered higher premiums, offered a reduced sum insured, or declined if your answers are not acceptable to the insurer. The advantage of such an application is that it only requires yes/no answers: nobody asks you to explain anything in detail or remember every detail, and no medical tests are required. If your answers are acceptable from the insurer’s point of view, you get coverage immediately, without any prolonged underwriting process or requests to your doctor. Of course, it is still worth thinking carefully about some questions (for example, the question “Have you ever had cancer?” will have one answer, while the question “Have you had cancer in the last 5 years?” may have a different one – here you need to remember exactly).

Sometimes people want to delay applying for life insurance for some reason (usually due to health) or after being declined. They can reapply after 1–2 years if the situation has changed. Many people who were declined due to weight, blood pressure, diabetes, or mental‑health issues come back after a year or two with improved results and obtain standard insurance.

Moreover, insurer statistics and underwriting guidelines may also change over 1–2 years, so a person whom the same insurer previously refused may now be insurable.

Important steps that everyone already knows:

-Regular medical checkups.

-Do not smoke; drink in moderation, not so that most of your calorie intake comes from glasses and bottles.

-Follow your doctor’s recommendations.

-Monitor your weight, blood pressure, cholesterol, and blood‑sugar levels.

 

How to approach a decline psychologically

A decline is not an evaluation of your personality. It does not mean that you are “defective” or “incomplete.” It is simply a business decision based on statistics and medical data.

If you have any questions, you can always reach out to us. We are an insurance brokerage with years of experience and a genuine desire to find a solution when other agents could not help.

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