Life Insurance & Depression

    Does Mental Illness Affect Your Insurance Rates?

    About 40.6 million Americans suffer from a physical or mental disability. If you do, you might be wondering whether you still qualify for life insurance. 

    While depression or anxiety won't hinder your ability to take out life insurance coverage, some insurers might perceive your mental health condition as a risk. In this guide, you’ll learn about the relationship between life insurance and depression, and how to find the right policy.

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    Can You Get Life Insurance If You Suffer From Depression?

    The short answer is yes, you can still get life insurance coverage if you suffer from depression or anxiety.

    During the underwriting process, you must disclose any history of depression or anxiety. While someone living with a mental health condition is still entitled to full coverage and a death benefit, life insurance rates might increase based on:

    • The severity of the mental health condition
    • The date of diagnosis
    • Whether the patient is seeking treatment from a licensed healthcare provider
    • The type of medication prescribed

    Your life insurance company might also request additional personal information regarding your overall lifestyle and health.

    How Mental Illness Affects Life Insurance Rates

    When determining how much a policy will cost, a life insurance company considers various factors. Other than the diagnosis itself, they also evaluate information like family medical history, evidence of substance abuse, or whether you have made a suicide attempt in the past.

    The information you provide can affect your health classification, which dictates how much you pay in premiums.

    Health Classification

    Depending on your history with mental illness, a life insurance company may categorize you as one of the following: 

    Preferred & Preferred Plus

    These are the best risk classifications you can get from your life insurance company. A Preferred or Preferred Plus status indicates that an insurance company perceives your mental illness as mild or very well-controlled.

    Someone with anxiety or depression who qualifies for Preferred or Preferred Plus is likely taking little to no medication. Their depression or anxiety might also have minimal bearing on their personal and professional lives. Thus, the applicant can take advantage of the best possible life insurance rates. 

    Standard Plus

    Standard Plus health classifications indicate a few concerning health factors. Life insurance companies may classify someone diagnosed with depression as Standard Plus if they take more than one prescription medication or have been hospitalized in the past.


    Substandard health classifications are given to individuals who are considered high-risk or severely impacted by their mental illness. Under the substandard class, applicants can be further categorized into lower letter grades. Lower letter grades can increase premiums by up to 25%.

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    How Life Insurance Companies Assess Applicants With Mental Illness

    Underwriting guidelines consider your health history, specific diagnosis, and potentially high-risk habits. In light of this, many adults go without professional help or delay treatment to secure their preferred life insurance policy.

    Life insurance companies prefer individuals who get diagnosed and take steps to reduce symptoms. Other than a diagnosis, insurance companies also request the following information.

    • Treatment: Life insurance agents consider individuals low-risk if they seek treatment and attend regular follow-up sessions. 
    • Lifestyle: If you have a poor health history, adjusting lifestyle habits can help you achieve a better health classification. Get regular exercise, weight control, no tobacco consumption, and other positive habits to avoid a higher premium.
    • Age: If you are applying for life insurance with a history of depression, your insurer will want to know the age you were diagnosed. How long it’s been since your diagnosis may impact the conditions of your term life insurance policy.
    • Suicide attempts: Your insurer will factor in suicidal thoughts, emergency room visits, and concurrent disorders (e.g. anxiety disorder, post-traumatic stress disorder or PTSD).
    • Substance abuse: Some individuals suffering from major depressive disorder will have a history of alcohol abuse and tobacco intake. A few alcoholic beverages a week won't drastically impact the terms of your life insurance policy. However, excessive use or addiction can prevent you from getting the best possible health classification and may increase your life insurance quotes.
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    How To Get Life Insurance If You Suffer From Depression

    As awkward as a conversation with an insurance company about your mental health can be, it's best not to delay the process. These tips will help you get started on your health insurance application.

    Find The Right Agent

    When buying life insurance with depression, keep in mind that some insurers are not as lenient as others. Instead of consulting with life insurance companies directly, consider working with an independent agent. Licensed freelancers work with a multitude of companies and will help you find the most affordable policy that’s best suited for you.

    Compare Quotes

    Getting life insurance with depression doesn't mean you can’t obtain the best possible rate class. Work with a term life insurance agent to get quotes from different insurers – some may offer high coverage for lower premiums, even if you have a mental illness. Some flexible insurers might even offer more affordable no-medical-exam policies for applicants with depression and anxiety.

    Prepare Medical Documentation

    Disclose your full medical history to help your insurer develop an accurate risk profile and charge you the appropriate premiums. Prepare records of your depression and anxiety treatment, along with a list of your current and previous medications. Make sure to also provide:

    • The name(s) of your therapist(s)
    • Contact information of each healthcare provider (clinic landline or email address)
    • The duration of treatment
    • The names and dosages of each type of medication, and any changes to your medication plan
    • The cause of depression, whether idiopathic or situational
    • All follow-up reports

    When classifying applicants with depression and anxiety, life insurance providers want consistency. Even if you have a diagnosis of severe depression, you can secure good rates by:

    • Maintaining steady employment
    • Being consistent with your treatment plan
    • Being clear and honest about previous suicide attempts

    Life Insurance Alternatives For People With Mental Health Conditions

    Those who suffer from severe anxiety or depression may not be able to afford higher premiums, especially if they couldn’t secure a preferred health classification. 

    The good news is that applicants can opt for no-medical-exam life insurance policies. However, of the 50% of applicants who buy no-exam insurance, not everyone qualifies. If you think you can push your luck, you can apply for:

    Guaranteed Life Insurance

    Guaranteed issue life insurance doesn't turn down its applicants. Individuals can qualify without having to disclose their conditions or answer health-related questions. However, a guaranteed policy is significantly more expensive and may not be worth the coverage you pay for.

    With a guaranteed policy, your coverage typically caps between $10,000 to $25,000. This is compared to an average of $250,000 on a traditional term life insurance contract. 

    Unless you die in an accident, a guaranteed life insurance policy enforces a waiting period of 2 to 3 years before releasing your death benefit. If you die a natural death within this 2 to 3 year period, your insurer may not release the payout or return only a portion of the premiums. 

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    Simplified Issue Life Insurance

    Another alternative to a term life insurance policy is a simplified issue contract. Unlike a traditional life insurance process, you don’t have to take a medical exam. Instead, you'll just have to answer a few health questions that the company then uses to develop a modified risk assessment. However, some Simplified issue life insurance's main selling point is how quickly you can get coverage. You can receive anywhere between $5,000 to $100,000 of coverage in days, compared to the usual four to eight-week approval period. Applicants can also purchase riders and add-ons. 

    Keep in mind that some companies require applicants to be between 45 and 85-years-old to qualify.

    FAQ About Buying Life Insurance With Depression

    Below are a few frequently asked questions about applying for life insurance as a person with anxiety or depression.

    Can you choose not to disclose your depression diagnosis?

    Depression isn't a condition that manifests visually. Thus, it can be tempting to choose not to disclose your history of anxiety and depression when you take a medical exam.

    However, the underwriting process is more meticulous than you think. In some cases, insurers might refer to the Medical Information Bureau (MIB) to fact-check suspicious or incomplete applications. 

    To avoid having to give up your contract, provide information in as much detail as possible. If a firm sees that you are working towards bettering your condition, they'll likely be more lenient throughout the process. If you don’t disclose your situation, your company can revoke your policy altogether.

    Can you be denied life insurance if you suffer from depression?

    A life insurance company won’t deny an applicant who suffers from anxiety and depression. Thanks to the Mental Health Parity and Addiction Equity Act of 2008, businesses cannot discriminate against those with mental illness. As such, insurers must classify people with bipolar disorder and other mental illnesses the same way they would a person with high blood pressure.

    Does life insurance cost more for people with depression?

    Though your mental illness won't affect the amount of coverage you are entitled to, you may have to pay higher premiums. How much your policy costs will depend on whether you’re seeking treatment or are on medication. You can still get a preferred health rating if you are taking no more than one prescribed medication. 

    Can you contest a low health classification?

    People unhappy with their health rating can request an underwriting review or lower premiums. However, it'll only make sense to do so if you can prove that you've made positive changes to your health and lifestyle.

    For instance, if your primary healthcare provider decides you no longer require specific medication, make sure you communicate this to your insurer. Doing so can help you obtain a better health classification and lower premiums because you’ll be considered lower risk.

    Can you apply for a new policy if you've been previously declined?

    There are many options for agents online, so you’ll be sure to find one willing to offer a contract even if you’ve been previously declined.

    People can also increase their chances of securing a policy by making the necessary lifestyle adjustments (as recommended by a doctor). If a firm sees that you’re taking the steps towards bettering your health issues, the more lenient they will be during the application process. 

    Do your loved ones still get the payout if you commit suicide?

    Depending on their suicide clause, an insurer may or may not release the death benefit if a policyholder commits suicide. Some policies will release the payout if the suicide occurred at least 24 months after the policy became active.

    This clause prevents individuals from purchasing a policy and committing suicide to pass on their benefits immediately. The provision also covers physician-assisted suicide, which allows individuals with a terminal illness to end their lives legally. 

    In Conclusion

    A history of depression shouldn't hinder your ability to take out life insurance. However, disclosing information and medical records regarding your condition is essential to getting coverage. If you worry about your application getting rejected, taking medication or otherwise bettering your condition can increase your chances of securing a policy.

    Safeguard your family's financial future with the help of Wesley Insurance, LLC. Regardless of your diagnosis, our consultancy services can help you!

    Written By Cameron McDowell
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