Ptsd And Life Insurance: Disclosure Necessary?

Post-Traumatic Stress Disorder (PTSD) is a mental health condition that can develop after a person has experienced or witnessed a traumatic event. While living with PTSD can be difficult, individuals with this condition can still obtain life insurance coverage. However, it is essential to understand how disclosing PTSD may impact the insurance application process and the subsequent policy.

Do I have to disclose PTSD to life insurance?

It is understandable that you may feel embarrassed or scared to disclose your diagnosis of post-traumatic stress disorder (PTSD) when applying for life insurance. However, it is crucial to be honest and transparent about your mental health condition during the application process. Failing to disclose PTSD on your life insurance application can have serious consequences, including denial of coverage, increased premiums, or even policy cancellation.

The Impact of PTSD on Life Insurance

PTSD can affect your life insurance rates and the availability of coverage. Life insurance companies view PTSD as a pre-existing condition and consider it a risk factor in their underwriting process. The severity of your PTSD symptoms, treatment history, and overall health will play a significant role in determining your eligibility and the cost of coverage.

Disclosing PTSD to Life Insurance Providers

When applying for life insurance, you will likely encounter questions about your mental health, including your PTSD diagnosis. Here are some common questions that life insurance providers may ask:

• When were you diagnosed with PTSD?
• What medications are you currently taking for PTSD?
• Are you undergoing treatment or therapy for PTSD?
• Have you been hospitalized due to PTSD?
• Have you experienced any interruptions in work or social activities because of PTSD?
• Have you had thoughts of suicide or self-harm?

It is important to answer these questions honestly and provide detailed information about your medical history and treatment plan. Life insurance companies will also consider your overall health and lifestyle, including your employment history, physical activity level, and substance use.

Working with an Independent Agent

To navigate the complexities of finding life insurance with PTSD, it is advisable to work with an independent life insurance agent. An independent agent can help you find the right company that understands and accommodates your specific needs. They can guide you through the application process, provide advice on disclosing your PTSD, and assist in finding the most favourable rates and coverage options.

Alternative Options

If you are unable to obtain traditional life insurance due to severe PTSD or other factors, there are alternative solutions available:

• Guaranteed issue life insurance: This type of policy does not require a medical exam or health questions and offers coverage regardless of your health condition. However, it typically has a waiting period of two years before the full death benefit is payable.
• Accidental death coverage: This coverage is affordable and protects against deaths resulting from accidental bodily injuries. It does not require medical underwriting, making it a viable option for those with PTSD who cannot obtain traditional life insurance.

In conclusion, while disclosing PTSD to life insurance providers may seem daunting, it is essential for obtaining appropriate coverage. By working with an independent agent and being transparent about your condition, you can secure life insurance that provides peace of mind and financial protection for your loved ones.

What is the application process like?

The life insurance application process can be invasive, especially for those with mental health issues. It is important to be honest about your condition when you apply. You will be required to undergo a medical exam, and possibly a psychological examination, which will uncover any medications or conditions you have.

• When were you diagnosed?
• How severe is your condition?
• Have you been hospitalized for your condition?
• Do you take medications and what are they?
• Have you attempted suicide?
• Do you see your doctor, psychologist, or counsellor regularly?
• What is your employment history since the traumatic event?
• What is your level of physical activity?
• Do you use alcohol or tobacco?

The underwriter is looking for proof that your condition is under control and that you are under the care of a medical professional. The more detailed your medical history and doctor's records, the better your chances of receiving a good health class rating.

The application process will also include basic information such as your name, address, occupation, and employer. You will also be asked about lifestyle habits, health histories of immediate family members, financial information, risky hobbies, and criminal convictions.

Will non-disclosure be considered insurance fraud?

Non-disclosure of information to an insurance company is a serious matter and can have legal repercussions. While it may be scary and embarrassing to disclose a diagnosis of PTSD on a life insurance application, it is essential to be honest about your condition. If you are found to have withheld information, your insurance policy could be cancelled, and your claim rejected.

Insurance fraud occurs when an insurance company, agent, adjuster, or consumer commits a deliberate deception to gain an illegitimate benefit. Soft fraud, a more common type of fraud, occurs when a policyholder exaggerates a legitimate claim or omits/lies about information on an application to obtain a lower premium. If you are found to have lied on your insurance application, you could, in some cases, be charged with insurance fraud.

In the case of life insurance, the underwriter will want to rule out any high-risk behaviours or disorders. PTSD is considered a high-risk condition, and the underwriter will want to see proof that your condition is under control and that you are under the care of a medical professional. The underwriter will also assess your lifestyle, including your employment history, level of physical activity, and alcohol or tobacco use.

If you have been diagnosed with mild PTSD, are controlling your condition with medication or counselling, and have not been hospitalized recently, you can generally expect to receive a standard health class rating. However, if you have been hospitalized for PTSD within the past 12-24 months or require substantial medication to manage your symptoms, you may be given a lower health class rating and face higher premiums.

If you fail to disclose your PTSD diagnosis and the insurance company finds out, they may ""avoid" your cover. This means that the insurance policy will be treated as if it never existed, and your premiums will be refunded. The insurance company will then decline any claims made on that policy. However, an insurer can only avoid a policy if they can prove that the non-disclosure of information would have changed their decision to offer you cover.

In some cases, an insurer may choose to retrospectively vary your insurance cover. For example, they might apply a mental health exclusion to the policy, which would apply from the date the policy was taken out. It is important to note that an insurer's rights to avoid a policy or vary its terms are limited by legislation. If your insurance is avoided or your claim is rejected due to non-disclosure, you should seek legal advice to determine if the insurer's decision is within the law.

What are the chances of approval with PTSD?

It is a common misconception that a life insurance application will be denied based on a PTSD diagnosis. However, it is indeed possible to obtain life insurance with PTSD, although the chances of approval will depend on the severity of the condition and other factors.

The approval of life insurance for individuals with PTSD will depend on several factors, including the severity of the condition, current medications, and the presence of any other underlying health conditions or mood disorders such as depression. Mild PTSD that is well-controlled, without recent hospitalizations or suicide attempts, usually qualifies for a standard rate class. The more severe the PTSD, the lower the applicant will fall in the rate class table, resulting in higher premiums.

For those with severe PTSD, a guaranteed issue life insurance policy may be recommended. This type of policy has a quick and easy application process and does not require a traditional medical underwriting assessment, ensuring coverage can be obtained without the risk of being declined due to PTSD. Face amounts for guaranteed issue life insurance policies typically range from $5,000 to $30,000, and there is usually a two-year waiting period before the full death benefit amount is payable.

To increase the chances of approval, individuals with PTSD should consider working with an independent insurance agent who understands the nuances of applying for life insurance with this condition. The agent can guide them through the application process, recommend suitable insurance companies, and communicate with underwriters to advocate for their client.

Underwriters will assess various factors to determine the likelihood of approval for life insurance with PTSD. These factors include the applicant's work history, overall lifestyle, physical activity level, and use of alcohol, tobacco, or drugs. Being employed, physically active, and free from substance use will improve the chances of approval and result in better rates.

Additionally, underwriters will seek proof that the applicant's PTSD is under control and that they are complying with treatment recommendations. This includes taking prescribed medications consistently and attending regular appointments with a doctor, psychologist, or counsellor. Providing detailed medical records and a comprehensive medical history will also enhance the chances of receiving a favourable health class rating.

In summary, while individuals with PTSD may face challenges in obtaining life insurance, it is certainly achievable. Working with an independent insurance agent, managing the condition effectively, and maintaining a healthy lifestyle will increase the chances of approval and help secure more affordable premiums.

What are the best life insurance companies for PTSD?

It is important to note that life insurance providers must offer coverage by law, regardless of mental disabilities. However, some life insurance companies are more accommodating than others for people with Post-Traumatic Stress Disorder (PTSD). Here is a list of some of the best life insurance companies for people with PTSD:

Prudential

Prudential is one of the best life insurance companies for people with mental health conditions overall. It is also one of the best for bipolar disorder specifically. Prudential has nearly four million policyholders and has been in business for 150 years. It offers competitive coverage options for seniors and people with some of the most common medical conditions, including asthma, depression, and fibromyalgia. Prudential is also more likely to offer better health classifications for moderate to severe conditions than other insurers.

Legal & General America

Legal & General America, which also does business as Banner Life and William Penn, has some of the longest term lengths and most competitive life insurance rates available, even for people with a history of medical conditions. It can offer affordable rates for people with depression, anxiety, and PTSD. For instance, if you are currently on up to one medication for treating PTSD, you are eligible for the third-best rates, assuming you have consulted a therapist and are able to work full-time. Legal & General America can also offer affordable rates if you are on no medication, one medication, or two medications for depression.

Brighthouse Financial

Brighthouse Financial offers competitive rates, comprehensive coverage, and application decisions in as little as 24 hours, making it a great choice for people who want to get life insurance coverage without having to take a medical exam. It is the best life insurance company for ADHD and the best for no-exam life insurance for people with mental health conditions. Brighthouse Financial may offer you its best rates, usually reserved for people in excellent health, regardless of how recently you were diagnosed with ADHD.

AIG (American General Life Insurance Company)

AIG offers a guaranteed acceptance policy with a two-year waiting period.

USAA

USAA life insurance will replace your SGLI (Servicemembers' Group Life Insurance) with a term policy. SGLI is a low-cost term life insurance policy offering a maximum face amount of $400,000. It does not require an application or medical underwriting, and the premium will automatically be deducted from your base pay. However, SGLI only covers those on active duty, so once you retire from the military, you will need to find another life insurance option. You can convert your SGLI life insurance policy to a VGLI (Veteran's Group Life Insurance) policy within 240 days of separation without needing to answer any health questions.

Veterans Affairs (VA)

The VA provides veterans, service members, and their families with over $1.3 trillion in life insurance coverage each year.

Frequently asked questions