Mental Health: Life Insurance Premium's Unseen Influence

Mental health conditions can affect the cost of life insurance, with some insurers charging higher premiums for those with mental health issues. However, it is still possible to obtain life insurance while being treated for a mental health issue. Life insurance companies commonly view conditions such as ADHD, borderline personality disorder, dissociative disorders, OCD, PTSD, and schizoaffective disorder as mental health issues. When applying for life insurance, insurers will want to know how your mental health affects your daily life, your ability to keep a job, the severity of your condition, how long you've had your condition, and whether you are undergoing successful treatment.

Severity of mental health condition

The severity of a mental health condition is a key factor in determining life insurance premiums and eligibility. Insurers are likely to ask questions about the impact of the condition on daily life, such as the ability to care for oneself and maintain employment. They may also inquire about hospitalisations, treatments, and medications.

In general, the more severe the mental health condition, the higher the insurance risk, and thus the higher the premium. Conditions with a higher likelihood of suicide, such as severe anxiety, depression, schizophrenia, and substance abuse, often result in higher premiums or even application denial.

Insurers consider the number of medications and their types and strengths. They also assess whether the treatment is working and if the condition is well-managed. A well-managed condition may increase the chances of obtaining life insurance.

The duration of the condition also matters. Insurers may be more inclined to grant life insurance if the condition is short-term. However, for long-term conditions like schizophrenia, it may be necessary to apply to multiple insurers to find coverage.

Treatment methods

Mental health issues are highly individualised, and there is no "one size fits all" treatment. Treatment methods vary from person to person, and even those with the same diagnosis will have different experiences, needs, goals, and objectives for treatment. Treatment methods can include medication, counselling, social support, education, and therapy.

Medication

Medication can help manage symptoms of mental illness, but it does not outright cure it. Medication is often paired with psychotherapy to promote recovery.

Counselling

Counselling, or therapy, involves speaking with a trained therapist in a safe and confidential environment to explore and understand feelings and behaviours and gain coping skills. Therapy can take many forms, from learning relaxation skills to intensively reworking thinking patterns.

Social Support

Social support, acceptance, and encouragement from friends, family, and others can also aid recovery.

Education

Education about how to manage a mental health condition can provide skills and support to enrich the journey toward overall recovery and wellness.

Therapy

Therapy can take many forms, including:

• Cognitive Behavioural Therapy (CBT)
• Exposure Therapy
• Dialectical Behaviour Therapy
• Electroconvulsive Therapy (ECT)
• TMS and other brain stimulation therapies

Ability to maintain employment

Mental health issues can have a significant impact on a person's ability to maintain employment. According to the World Health Organization (WHO), mental disorders and other mental health conditions can affect a person's confidence and identity at work, their capacity to work productively, their attendance, and their ability to retain or gain employment.

Insurers are interested in an applicant's ability to keep a job, except for those who are retired or have a physical disability. They want to assess whether an applicant's mental health condition could prevent them from meeting the challenges of employment. The more independent an individual is, the more likely they are to get coverage. Insurers also consider whether an applicant is undergoing successful treatment and whether their treatment plan is consistent.

Certain working conditions can pose risks to mental health, including:

• Under-use of skills or being under-skilled for work
• Excessive workloads, understaffing, or an unmanageable work pace
• Long, unsocial, or inflexible working hours
• Lack of control over job design or workload
• Unsafe or poor physical working conditions
• Organizational culture that enables negative behaviours
• Limited support from colleagues or authoritarian supervision
• Violence, harassment, or bullying
• Discrimination and exclusion
• Under- or over-promotion
• Job insecurity, inadequate pay, or poor investment in career development
• Conflicting home/work demands

These risks can be mitigated by creating safe and healthy working environments, which can minimize tension and conflicts, improve staff retention, enhance work performance and productivity, and facilitate recovery and inclusion for people with mental health conditions.

In the context of life insurance, mental health issues can affect premiums and the ability to obtain coverage. Insurers consider the impact of mental health on daily life, including the ability to maintain employment. While mental health conditions may result in higher premiums or difficulty in obtaining coverage, it is still possible to obtain life insurance with a mental health history.

Ability to live independently

When it comes to life insurance, insurers are interested in any mental health diagnoses that may affect your ability to live independently and perform day-to-day tasks. The more independent you are, the more likely you are to get coverage. Here are some factors that may impact your ability to live independently with a mental illness:

• Financial management: Living independently requires the ability to manage finances, including paying rent and bills on time. This can be challenging for individuals with mental illnesses who may struggle with organisation, motivation, or financial decision-making.
• Physical and Emotional Self-Care: Taking care of physical and emotional needs, such as maintaining personal hygiene, preparing meals, and managing mental health symptoms, is essential for independent living. Mental illness can make it difficult to consistently meet these needs without support.
• Treatment and Medication Adherence: Adhering to a treatment plan and taking medications as prescribed are crucial for managing mental health. However, individuals with mental illness may struggle with medication adherence, especially if they experience side effects or forget to take their medication.
• Social Support and Isolation: Living independently does not mean living in isolation. Social support from family and friends is often necessary to maintain mental well-being and manage daily tasks. Lacking a strong support system can hinder independent living.
• Employment: Maintaining employment is an important aspect of independent living. Mental illness can impact an individual's ability to work consistently, perform job duties, and manage work-related stress.
• Housing and Daily Living Skills: Individuals with mental illness may require support to secure and maintain housing, manage household tasks, and perform activities of daily living, such as cooking, cleaning, and transportation.
• Crisis Management: Mental health crises, such as severe depression or psychosis, can impair an individual's ability to live independently. Having a crisis management plan and access to emergency support is crucial for maintaining independence.

While living independently with a mental illness can be challenging, it is achievable with the right support and resources. Supported housing, group homes, and therapeutic communities can provide individuals with mental illness the necessary assistance to live as independently as possible. Additionally, building a strong support network of family, friends, and mental health professionals can help individuals manage their condition and maintain their independence.

History of self-harm

A history of self-harm can have a significant impact on life insurance premiums and coverage options. Insurers generally view self-harm as a high-risk factor due to its potential association with suicide or shortened life expectancy. This perception can lead to higher premiums or even denial of coverage in some cases.

When it comes to life insurance, a history of self-harm is a critical factor that insurers consider when evaluating applications. Self-harm is often associated with mental health issues, and insurers typically categorize individuals with such a history as high-risk. This classification can have several implications for the availability and cost of life insurance.

Insurers may deny coverage or offer it at a higher premium to individuals with a history of self-harm. They perceive these individuals as having an elevated risk of suicide or a shorter life expectancy. As a result, insurers may compensate for this perceived risk by increasing premiums or, in some cases, declining coverage altogether. However, it is important to note that each insurer has its own underwriting guidelines, and being denied by one company does not necessarily mean the same outcome with another.

The availability of life insurance for individuals with a history of self-harm can also depend on the stability of their condition. If an individual's condition has been stable for six months or more, whether through medication or other professional support, they may be able to find cover. Mainstream insurers may still offer coverage, especially if the individual's mental health issues are in the past and they can demonstrate consistent treatment and improvement.

The nature and severity of the condition, the onset or triggering event, medication usage, psychotherapy and counselling, and the number and timing of any suicide attempts are all factors that underwriters will consider when assessing an individual's application. Recent suicide attempts or suicidal thoughts can make finding cover more challenging and expensive. Conversely, if incidences occurred a while ago, this will be taken into account relative to any predispositions or triggers the individual may have.

While finding life insurance with a history of self-harm can be difficult, there are specialist insurers, such as Pulse Insurance, that focus on finding cover for individuals with mental health disorders. These insurers strive to offer a caring and sensitive service, treating each person as an individual. They work to find solutions even when other life insurers have declined to provide cover. However, it is important to note that full transparency about mental health disorders and any other medical conditions is crucial when applying for life insurance to avoid issues with claims in the future.

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