What happens when you are turned down for life insurance? Not all hope is lost

Fearing a "DECLINE" on your insurance application? It can actually help you, if you understand the rules.

The Medical Information Bureau (MIB) is a database in which member life insurance companies create a file on any new applicant and "code" any health issues that would be pertinent to the underwriting of an insurance case. By mitigating the risk of applicant errors, omissions and misrepresentations, the MIB may help lower the cost of life and health insurance for consumers.

Most of us believe the MIB to be a secret high-powered organization where all of our health issues are hidden, ready to come out and hinder us at every turn. We took a closer look and learned that it's actually a tool that works in your favour, as long as you understand the rules.

After experiencing a particularly complex insurance case, we realized that the MIB is a critical piece to understand when applying.

We consulted the MIB website and drew out the key facts you need to know:

  • It is your right to obtain a report once per year free of charge.

  • The MIB keeps a file on you for only 7 years. After this period of time, no records about you are kept.

  • Your MIB file is not a complete medical record, it only contains small pieces of information reported by member insurance companies.

  • Life insurance companies are not making application decisions based upon your MIB report. MIB bylaws do not allow insurance companies to make a decision on insurability based solely on the report.

  • The mission of the MIB is to prevent fraud and misrepresentation. The MIB helps insurance companies see if you have not been truthful in your application, by comparing the information to what you may have submitted in a past application. It helps them to understand why you may have been denied insurance before.

  • You are permitted to appeal any errors that you feel are incorrectly preventing you from obtaining insurance. They will investigate. You can also place a "statement of dispute" in your file if their investigation is unfair in your opinion.

  • It is ultimately up to you to allow an insurance company to access your MIB record, and you consent to this when you apply.

  • MIB also offers a life insurance policy “finder” service for those looking for a relative’s lost life insurance policy. But just as with your own report, records go back only seven years.