Life Insurance And Depression: Can You Be Denied Coverage?

Life insurance is a common way to protect your loved ones from financial hardship in your absence. However, mental illness can make getting life insurance more difficult. It is possible for a life insurance company to deny coverage due to an ongoing mental health condition, but this is not always the case. A mental illness does not automatically disqualify a person from life insurance eligibility. The decision to deny coverage is typically made after a thorough review of an applicant's medical history and specific details of the condition.

Life insurance companies' criteria for mental health issues

Mental health issues can affect your life insurance eligibility, but it is still possible to qualify for coverage. While life insurance companies do consider mental health when reviewing applications, they are mostly interested in diagnoses that require medication or affect your daily life and ability to work.

Factors Considered by Life Insurance Companies

• Severity of the condition: The more severe your diagnosis, the higher the impact on your insurance premium.
• Treatment records: Inconsistent treatment records can lead to higher premiums.
• Health issues: Any health issues linked to your mental health can affect your premium.
• Hospitalizations: Recent or multiple hospitalizations due to mental health issues may increase your premium or lead to a denial of coverage.
• Suicide attempts: A history of suicide attempts may result in a denial of coverage.
• Medication: The number and type of medications you are taking may be considered. Being on multiple medications or frequently changing dosages can increase your premium.
• Ability to work: If you are unable to work due to your mental health condition, you may be denied coverage.
• Daily living tasks: Mental health conditions that affect your ability to perform daily tasks can increase your premium.

Types of Life Insurance Policies for Mental Health Conditions

• Term life insurance: This is the most popular type of life insurance as it is affordable and lasts for a set number of years, usually between 10 and 30 years. People with mental health conditions can often qualify for affordable term life insurance rates, but recent hospitalizations may lead to a postponement of the application.
• Whole life insurance: People with mental health conditions can also qualify for whole life insurance, which is a type of permanent life insurance with a cash value component. Similar to term life insurance, recent hospitalizations may delay eligibility.
• No-medical-exam life insurance: Some companies offer no-medical-exam life insurance, where you complete a health questionnaire instead of undergoing an exam. This may be an option for people with mild mental health conditions who are undergoing stable treatment.
• Guaranteed issue life insurance: This type of permanent life insurance does not require a medical exam and offers almost certain approval. However, it is significantly more expensive and has lower death benefits, usually capped around $25,000.
• Group life insurance: Group life insurance is offered by employers and is generally inexpensive and easy to obtain. It does not require medical underwriting, but the policy is only active while you are employed with the company.

Factors that can disqualify someone from getting life insurance

While it is difficult to say that any specific medical condition automatically disqualifies a person from getting life insurance, there are a number of conditions that can make it more difficult and/or expensive to obtain. These include:

• Anxiety and depression
• High blood pressure (hypertension)
• Chronic kidney disease
• Chronic obstructive pulmonary disease (COPD)
• Liver disease (e.g. cirrhosis)
• Organ transplant recipients

Pre-existing conditions are often considered high-risk by insurance companies and can lead to disqualification. Chronic conditions that require long-term medication or treatment can also impact eligibility. Insurance providers evaluate these conditions through a process called medical underwriting, which considers various factors such as the severity of the condition and the individual's family medical history.

Other factors that can affect your eligibility for life insurance include:

• Age: Older individuals are considered higher risk.
• Gender: Women tend to live longer and thus enjoy lower rates.
• Lifestyle: Risky habits and dangerous hobbies (e.g. smoking, scuba diving) can make life insurance more costly.
• Medical history: Certain medical conditions may deem an applicant too high-risk for an insurance company to insure.
• Occupation: Working in a high-risk occupation, such as commercial driving or law enforcement, may result in higher premiums or challenges in obtaining coverage.
• Criminal history: Serious criminal convictions, recent convictions, or ongoing legal issues may disqualify an individual from obtaining life insurance.
• Substance abuse: Active substance abuse, especially with hard drugs, can pose a challenge to qualifying for life insurance.
• History of suicide attempts: A previous suicide attempt or history of mental health issues related to suicidal ideation might make it challenging to obtain life insurance coverage, especially without a considerable waiting period.

It is important to note that criteria for eligibility may vary between insurance providers, and some specialized insurers may have policies tailored for individuals with certain criminal or social histories. Additionally, failing to disclose a pre-existing condition could result in a rejected application or cancellation of the policy if coverage has already been granted.

The impact of mental health on life insurance eligibility

Mental health conditions can impact the eligibility and cost of life insurance, but it is still possible to qualify for coverage. Mental illness is not uncommon, with one in five adults in the US living with a mental health condition. While a life insurance company may deny coverage due to an ongoing mental health issue, this decision is typically made after a thorough review of an applicant's medical history and specific details of the condition. A mental illness does not automatically disqualify someone from life insurance eligibility.

When reviewing a life insurance application, underwriters will consider factors such as age, gender, lifestyle, and medical history to determine an applicant's risk category. An individual may be denied coverage or face higher premiums if they fall into a high-risk category. This could include having a risky occupation or hobby, or being diagnosed with a certain medical condition.

Life insurance companies typically require a medical exam and a questionnaire about medical history as part of the application process. They may ask specific questions about mental health, including the name and severity of the condition, treatment plan, medications, and how the condition affects daily life. Failing to disclose a pre-existing mental health condition could result in a rejected application or issues with future insurance claims.

Certain mental health conditions, such as severe anxiety, depression, schizophrenia, and substance abuse, may result in higher premiums, lower coverage limits, or application denial due to their association with an increased risk of suicide. However, seeing a mental health professional and adhering to a treatment plan can increase the chances of approval and better rates.

For individuals with mental health challenges, it is important to shop around and explore different insurance providers and policy types. Working with a licensed life insurance agent or broker can be beneficial in finding an insurer that is more likely to offer coverage. Guaranteed issue life insurance, which does not require a medical exam or questionnaire, can be an option for those who have been turned down for traditional term or permanent policies. Group life insurance through an employer is another alternative, as it is often easier to obtain and does not require medical underwriting.

The importance of disclosing mental health on a life insurance application

Mental illness is not uncommon in the US, with around one in five adults experiencing mental health issues each year. Despite this, many people worry that a diagnosis will affect their ability to get life insurance. While it is true that an insurance company may deny coverage due to an ongoing mental health condition, this is not always the case. It is important to disclose mental health issues on a life insurance application, and doing so will not automatically disqualify an applicant from eligibility.

Firstly, it is important to be honest on a life insurance application. Failing to disclose a pre-existing condition could result in a rejected application or a cancelled policy. This may also be considered insurance fraud, making it difficult to get approved for life insurance in the future.

Secondly, insurance companies need to get a clear picture of an applicant's situation. They will ask questions about how mental health issues affect daily life, including the ability to care for oneself and maintain employment. They will also ask about treatment plans and medications. If an applicant can prove that their treatment is working, they are more likely to get life insurance.

If an applicant does not disclose their mental health issues and is then found to have lied on their application, the insurance company will need to conduct an investigation. This could lengthen the application process and, in some cases, result in charges of insurance fraud. In addition, the policy could be cancelled or there may be issues if a claim is filed.

Life insurance is available for those living with mental illness, although options may be limited depending on whether the condition is managed and the applicant is under supervised medical care. If an applicant has trouble getting life insurance on their own, they may be able to get group insurance through their employer. Another option is guaranteed life insurance, which is available to most people within a certain age bracket regardless of their health issues.

Options for life insurance with mental health conditions

Life insurance companies consider your mental health when you apply for coverage. They are in the business of risk and will assess how likely it is that you will file a claim. Mental health conditions can affect your physical well-being and your ability to complete day-to-day tasks, so insurers consider them a health risk.

However, it is still possible to qualify for life insurance coverage if you have a mental health condition. Here are some options to consider:

Term life insurance

Term life insurance offers coverage for a set period, usually between 10 and 30 years. This type of policy is generally cheaper than other types of life insurance, particularly if you are younger and in good health. If you have a mental health condition, you can often qualify for affordable term life insurance rates. However, if you've had a recent hospitalization or in-patient treatment, the insurance company may view this as a sign of higher risk and decide to postpone your application.

Permanent life insurance

Permanent life insurance lasts your entire life as long as you pay the premiums. It is usually more expensive than term life insurance. Permanent life insurance, such as whole life insurance or universal life insurance, offers a cash value component. Similar to term life insurance, your eligibility will be delayed if you've had a recent hospitalization or in-patient treatment.

Guaranteed issue life insurance

If you have been turned down for coverage due to your mental health condition, guaranteed issue life insurance might be a good option. This type of policy does not require any health questionnaires or medical exams. As long as you meet the age requirements (usually 50 to 80 years old), approval is guaranteed. However, the available death benefits are typically capped at a relatively low amount (around $25,000), and there is often a two-year waiting period before your beneficiaries can receive the full death benefit.

Group life insurance

Group life insurance is offered by employers through the workplace. These policies are often inexpensive and easy to obtain, and they generally do not require any medical underwriting to qualify. While obtaining coverage is generally easier than with other policy types, it is important to note that the policy will only remain active as long as you maintain employment with the company.

No-medical-exam life insurance

Some insurance companies offer no-medical-exam life insurance, even if you have a mental health condition. In these cases, you would complete a health questionnaire online or over the phone instead of undergoing an exam. If your condition is mild and stable, you may be able to qualify for this type of coverage.

When considering life insurance options with a mental health condition, it is important to shop around and compare quotes from different insurers. Working with an independent broker or a licensed life insurance agent can also be helpful, as they can guide you through the process and find the best coverage for your specific needs and budget.

Frequently asked questions