But what does this really mean for you?
The life insurance rating process
No questions on a history of being “declined, rated, or postponed” is significant, because any applicant who has previously received one of these underwriting decisions faces fewer choices and higher costs. Here’s how it works.
Similar to how a driver can be rated based on history of tickets, points issued, etc. that effects car insurance premiums, to a degree this is similar when it comes to life insurance. When applying, there are categories which take ones’ history of health and lifestyle into account.
Sometimes, an applicant doesn’t quite fit into standard categories. When this occurs, most life insurance suppliers assign them a table rating. Table ratings usually mean higher premiums because they are based on basic rates plus an additional percentage that is intended to correspond to the level of risk to insuring them.
Once you’ve received a rating, it sticks with you—unless the company you’re applying with does not ask you about ratings.
Declined and postponed decisions
There are some applicants who may get declined for coverage; this means that the insurer won’t issue any policy to that applicant at all, no matter what the circumstances are. Common reasons for declined life insurance applications are health issues such as a history of stroke, heart disease, cancer, or other serious disease. Other reasons for declined applications include lifestyle-related issues including illegal drug use.
The consequences of being declined vary. For applicants who have been declined there are usually fewer choices and higher rates. In fact, some companies will only offer restricted policies to those who have been declined in the past. In the end, other than successfully treating your current health problems or eliminating lifestyle conditions such as dangerous hobbies, you may not have many options if you’ve been declined.
When your life insurance application has been postponed, you are in a sort of life insurance-controlled limbo. They won’t offer you the standard life insurance you applied for right now, but by saying “postponed” they indicate that they might change their minds later. In this situation the option you may be left with is a less desirable policy that provides less coverage at a higher rate until the underwriter’s decision is reviewed.
The bottom line with declined, rated, or postponed applications is this: Declined means you have no insurance at all. With a rated application you may get coverage, but at a higher rate—and the rating is now on the record. With a postponed application you do not get the coverage you want for some period of time that is out of your control, while your history of health is under review. All three decisions may make it more cumbersome to apply and get affordable coverage.
No declined, rated, or postponed questions
It’s good to do some research. There are life insurance providers out there which can offer certain policies even to those with this kind of application history, but it may come with less coverage or at higher rates.
Canada Protection Plan’s No Medical & Simplified Issue Life Insurance line of products provides plans with high coverage amounts and very competitive rates. In fact, when compared to similar plans and benefits, the rates are among the lowest in the country. With the removal of the declined, rated, or postponed question, it means a worry-free application process as you seek out the best coverage to fit your needs.
We know how important the security of having life insurance is. For those who are hard to insure, simply need coverage quickly, or may have been rated, declined or postponed – Canada Protection Plan offers you a choice.
Have other questions about life insurance? Contact your Life Insurance Advisor or Canada Protection Plan 1‑877‑851‑9090 today.