Key Takeaways
- 60% of declined applicants can get coverage elsewhere—either different carrier or different product
- How you handle a decline generates 25% of referrals—clients remember who helped when things went wrong
- Guaranteed issue policies exist for nearly everyone—even if traditional underwriting fails
When Underwriting Says No
Client Question: "I was declined—does that mean I can never get life insurance?"
60% of declined applicants can get coverage through a different carrier, different product, or simplified/guaranteed issue options.
Possible Alternatives After Decline
| Alternative | Best For |
|---|---|
| Graded benefit policy | Health issues, guaranteed issue |
| Different carrier | Carrier-specific underwriting differences |
| Simplified issue | Avoids full medical underwriting |
| Group coverage | Through employer or association |
| Accidental death | Specific risk coverage, uninsurable otherwise |
| Wait and reapply | Temporary condition that will improve |
Breaking the Bad News
A client who has been declined for coverage
Setup
You need to tell a client their application was declined due to a combination of health factors. They were really counting on this coverage.
Client says:
“*Answers phone* Hey, did my policy come through? I've been waiting to hear. Tell me good news!”
Practice Objectives
- 1Deliver the news with empathy, not clinical detachment
- 2Explain what the underwriting decision was based on
- 3Give them time to react and process
- 4Discuss alternative options that might work
- 5Don't give up on helping them
Finding Alternatives
A declined client willing to explore options
Setup
After delivering the decline news, the client wants to know what other options exist. They still want protection for their family.
Client says:
“So I can't get regular life insurance. What are my options? There has to be something. I'll pay more if I have to—I just need my family to be protected somehow.”
Practice Objectives
- 1Explore graded benefit or guaranteed issue options
- 2Explain how these policies work differently
- 3Be honest about limitations (waiting periods, lower coverage)
- 4Discuss cost vs. benefit trade-offs
- 5Help them find some level of protection
The Angry Decline
A client who is upset about being declined
Setup
The client is angry about being declined. They feel the underwriting decision was unfair and wants to appeal or complain.
Client says:
“This is ridiculous! I had one heart issue three years ago and now I'm uninsurable? I've been healthy ever since! There must be something wrong with the underwriting. Can we appeal this? I want to talk to someone in charge.”
Practice Objectives
- 1Let them express their frustration without being defensive
- 2Explain the appeal process if one exists
- 3Be honest about the likelihood of reversal
- 4Explore if another carrier might view their case differently
- 5Maintain the relationship even if you can't help right now
A client is declined. The best immediate response is: