Do you need good credit to get life insurance?
Asked by: Craig Ortiz | Last update: December 16, 2025Score: 4.8/5 (34 votes)
Can you be denied life insurance for bad credit?
You may be happy to learn that your actual credit score won't have an impact on whether you qualify for most life insurance coverage. But your credit history may play a part. Not all life insurance companies check credit history as a part of their underwriting process.
What will disqualify me from life insurance?
A few common examples of pre-existing conditions include high blood pressure, diabetes, cancer, and asthma. Previous injuries might be considered pre-existing conditions, depending on their severity and any lasting effects.
Do life insurance companies look at credit?
Yes. A federal law, the Fair Credit Reporting Act (FCRA), states insurance companies have a “permissible purpose” to look at your credit information without your permission. Insurance companies must also comply with state insurance laws when using credit information in the underwriting and rating process.
Can you be a life insurance agent with bad credit?
Bottom line, while most applicants will be able to get an insurance license with bad credit, they may have difficulty getting appointed with the insurance carriers. Ultimately, that depends on what's on your credit, and will vary between each insurance carrier, as some are more flexible on bad credit than others.
Should I Ever Accept Life Insurance From My Employer?
Why do most life insurance agents fail?
The most commonly cited reason insurance agents fail is that they fail to listen to their customers and take the time to find the best product to suit their needs. Agents who bring the right solutions to customers build trust, and that helps them build a book of loyal customers.
Can you be denied insurance for bad credit?
In some states, yes, you could be denied coverage due to your credit. A very low insurance score might mean that a company considers you too great of a risk to insure, which could lead to the carrier denying coverage. However, some states do not allow this practice.
Can creditors access life insurance?
Creditors typically can't go after certain assets like your retirement accounts, living trusts or life insurance death benefits to pay off debts.
What is the score for life insurance?
An insurance score is a credit rating used by insurance companies to assess a potential insured consumer's level of risk. The insurance score is one of the primary determinants in how much monthly insurance premium the consumer will be assessed. Scores range between 200 and 997, with low scores reflecting higher risks.
Do you need a good credit score for life insurance?
Even though your credit score won't directly affect your life insurance application, certain details from your credit report can indicate that you might be a financial risk to your provider, such as: Bankruptcy. Carrying large credit card balances. High percentage of credit card use.
What disqualifies me for life insurance?
They can include engaging in risky hobbies and behaviors like skydiving; having a history of DUIs or speeding tickets; having a dangerous job like roofing; having a criminal record or a less than ideal financial history; being a smoker; and failing a drug test.
What is the cash value of a $10,000 life insurance policy?
Say, for example, that you purchase an insurance policy with a face value of $10,000. Once the policy matures, the cash value of the policy should equal $10,000.
Why would I be declined for life insurance?
Medical conditions such as diabetes, high blood pressure or heart disease may disqualify you from coverage if your illness is life-threatening. If you've had cancer or are currently undergoing cancer treatment, your life insurance application may be denied until you've been in remission a certain number of years.
Who is not eligible for life insurance?
Chronic conditions that require long-term medication or treatment can also impact eligibility. Some medical conditions that fall under scrutiny by life insurance companies include (but are not limited to): Cancer. Heart disease.
What not to say when applying for life insurance?
Tobacco use: Lying about smoking on a life insurance application likely constitutes a misrepresentation, even if you only smoke occasionally. Drug and alcohol use: Someone who engages in drug or alcohol misuse may omit this information.
Do you need good credit for insurance?
California, Hawaii, Massachusetts and Michigan prohibit or limit the use of credit as a rating factor in determining auto insurance rates.
Do insurance companies check your credit?
Most insurance companies use your credit history to help them decide whether to sell you insurance and how much it will cost.
How much money do you need for life insurance?
Your financial and family details will determine whether you need life insurance and, if so, how much you should have. If you choose to buy insurance, use one of the common methods to calculate the coverage you'll need, such as 10 times your salary.
How many years is best for life insurance?
For example, if you have a 34 year mortgage, you could take out life insurance for 34 years. If you have children, you may want to have cover in place until the youngest is likely to be financially independent, up to age 18, for example, or longer if you would like to account for higher education.
Can debt collectors come after life insurance money?
In most cases, the death benefit goes directly to your beneficiaries and not your estate. That means a creditor cannot make a claim against it. This holds true for a small final expense policy or a whole life policy.
Who pays the debts of a deceased person?
The executor — the person named in a will to carry out what it says after the person's death — is responsible for settling the deceased person's debts. If there's no will, the court may appoint an administrator, personal representative, or universal successor and give them the power to settle the affairs of the estate.
Does life insurance affect credit?
Life Insurance Companies Make Soft Inquiries
Therefore, it does not affect your credit score. So when you're in the process of researching or buying life insurance, the impact on your credit score (or lack thereof) isn't something to agonize over.
Can I get life insurance with bad credit?
Most insurance companies will not reject applications for insurance based only on a low credit-based insurance score, but they may only offer that applicant a policy with a higher premium or higher monthly rate. Paying a higher premium or rate could cost consumers hundreds of dollars per year.
Can I get insurance without credit?
It is a common pricing factor because of its apparent accuracy in helping auto insurers predict risk. Your credit score won't be considered if you live in certain states (California, Hawaii, Maryland, or Massachusetts) because state law prohibits it.
Can you be turned down for insurance because of your credit score?
California
Insurance companies in California don't use credit-based scores or your credit history for underwriting or rating auto policies, or setting rates for homeowners insurance. As a result, your credit won't impact your ability to get or renew a policy, or how much you pay in premiums.