Insurance is an industry that is based on risk. The insurance companies are hoping that people will take out policies and then never use them. In fact, that is the very business model that describes insurance as both an industry and as a product.

Insurance companies are happy to take our monthly premiums, but they are not happy to pay out claims. Below are some of the more common reasons why an application for income protection may be denied.

Mental Illness and Pre-existing Conditions

History of Mental Illness, which may include depression, is one of the common reasons that some applications for income protection may be denied. Insurance companies are looking for any kind of personal history that may increase the risk of accident or disability.

The human mind is complex symptoms of mental illness are not always clearly displayed or recognized, and therefore, are hard to dispute. People who are depressed may not care enough to work safely, and as such an insurance company may deny an income protection application. Pre-existing medical conditions such as cardiac anomalies like fibrillation, previous back injuries, etc. may also be a red flag to insurance companies because of the increased of a disabling accident.

Drug Use and Alcoholism

Applications for income protection can also be denied based on positive history of drug use or excessive alcoholism. Both drugs and alcohol are known to impair judgement which can lead to risky behaviours or activities. Because income protection policies are activated once an injury occurs that prevents the policy holder from working, insurance companies look closely at events that lead up to an accident.

Profession and Job Duties

There are jobs and professions that are not covered with income protection insurance. High risk industry are usually denied. Risk is measured differently by carriers, and as such, consumers should check with a broker about specific industries that may not be included. There are cases where people have been promoted at work, injured and then had their income protection claim denied because of their new job title. This is really a grey area, and as consumers, it is best to ask detailed questions before buying a policy.


Age is another criteria that can cause income protection applications to be denied. Most policies specify an age range to qualify. Typically the age range is 18-55 years. There are a few companies that will accept an income protection application for workers who are 16 years old, and a few companies that will extend coverage for people up to 65 years old. The normal range for the industry, however, is 18-55 years.

Past Claims

Applicants that have prior income protection claims may also find that their application for new insurance is denied. Again, this is seen as an increase in risk or even of fraud. If you have had an injury or illness that has caused you to become disabled, then the probability of that happening again is measured as risk.


If you are made redundant or your job is eliminated, than most likely your application for income protection insurance will be denied. There are some companies that do, however, offer income protection for redundancy.


The insurance industry measures risk and then assigns a policy cost for each new policy that is written. Situations that increase risk either raise the price of the policy or cause the application for the policy to be denied. The preceding paragraphs discuss some of the more common reasons why an application for income protection insurance may be denied.

As consumers, the best advice is to shop around to several different carriers. Not every insurance carrier has identical requirements, and some are not as strict as others.

If your claim is denied and an appeal is not an option, consumers can contact their local insurance ombudsman and see if the ombudsman can get to the bottom of the denial. The insurance ombudsman is an authority that operates independently. The service is also free and open to consumers with claims that are valued less than $100,000.

Using an insurance ombudsman to help sort out a denied application is a good option. The insurance ombudsman would be knowledgeable about laws and recent legal changes that govern the insurance industry. The ombudsman may also have other options for coverage available or connections to help find coverage for you. As a closing note, make sure that the application for insurance protection is filled out completely and that all of the information that is listed on the application is true.


(This article and all articles on this site are not to be taken as professional insurance advice, for such advice please speak to a registered insurance broker. We can connect you with a broker by using the form on this site.)

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