When you apply for life insurance with Policygenius, we work really hard to ensure that the rates we quote you are accurate. But sometimes an insurance company will offer you a higher premium or a different coverage amount than the one you applied for. This is called a modified offer.
Why did this happen?
There are a few possible reasons why you received a modified offer:
1. Your medical exam results revealed a worse health picture than your application. The most common reason for a modified offer is that your medical exam results contradict the information in your application. For example, if your medical exam reveals that you have elevated cholesterol and you didn’t know that when you applied, your rates could come back higher. Or if you under-reported your weight, that could affect your rates as well.
2. A records check revealed something to cause the insurer to increase your risk rating. If the insurance company requested more information from your doctor(s) as part of an APS, or attending physician statement, it’s possible that the resulting details prompted the underwriters to increase your health rating, and therefore your rates. Information from your motor vehicle report, credit report or a prescription record check could also result in a higher premium.
3. The insurer couldn’t find financial justification for the amount of coverage you requested. If the insurer thinks you’re asking for more coverage than can be justified by your income, then your offer could be for a lower amount of coverage. (The maximum allowed coverage is generally 20x your income, though it may be higher or lower depending on your age.)
What are my options if I get a modified offer?
As with any life insurance offer, you can simply decline it and move on. But here are the options we typically recommend:
1. Accept your modified offer. If your rates are higher than you hoped but you can still afford the monthly or yearly payment, we recommend that you accept the offer at the coverage amount you applied for. By doing so, you lock in those rates for the duration of the policy — even if you're declined by another company in the future. But if you leave a modified offer hanging while you apply to other insurers, there is a risk that their initial offer could be rescinded or modified again. By agreeing to a modified offer, your life is covered and your dependents are protected. Plus, if you later find a cheaper policy or decide you can't afford life insurance at all, there is no penalty for cancelling your policy.
2. Adjust your coverage and term length, then accept your modified offer. By lowering your coverage amount or shortening your term length, you can make your premiums more affordable while still providing protection for your family.
3. Accept your modified offer, and let us keep shopping for you. If you get a modified offer, we usually advise that you accept it. But after that, if we think we can find you a better rate with another insurer, we’ll shop your application materials to them. And if we think that the modified offer is the best rate that you’re going to get, we’ll tell you that, too.
Can I contest a modified offer?
If you believe that the insurance company made your modified offer based on incorrect information, it’s possible to push back — if you have recorded proof.
For example, if your medical exam results reveal elevated blood pressure, but you have recent medical records that prove that your blood pressure is in a lower range, the insurance company may review the records, order a new medical exam, and adjust your offer. Talk to your Policygenius team about your specific case.