Depression And Life Insurance: Does Diagnosis Impact Coverage?

Life insurance companies take all health factors into consideration when determining eligibility and policy rates. This means that a diagnosis of depression can affect your ability to secure life insurance coverage, as well as the premium rates you are eligible for. However, it is important to note that having depression does not automatically disqualify you from obtaining life insurance. The impact of depression on your life insurance application will depend on various factors, including the severity of your condition, your treatment history, and your overall health.

How does certified depression affect life insurance rates?

Life insurance companies factor in illnesses of all types when underwriting policies, potentially leaving those with depression facing higher premiums. However, it is still possible to obtain life insurance even with a history of mental illness.

Application Process

When applying for life insurance, it is important to disclose your full medical history, including any mental health disorders and medications used to treat them. Failure to do so could impact whether your claim is paid out and delay your coverage decision.

Underwriting Class

The presence of anxiety or depression without additional complications or symptoms, or mild to moderate depression, might not impact your underwriting class. However, if these conditions impact your work or school or require frequent medication changes, you may end up paying a higher premium. In very serious cases, you may not be eligible for traditional coverage.

Factors Affecting Rates

When determining rates, insurance companies consider the frequency, severity, treatment, and diagnosis details of mental health conditions. They also take into account the impact of these conditions on physical health and the likelihood of suicide. Conditions such as severe depression, bipolar disorder, or schizophrenia, which are more commonly linked to suicide, may result in higher premiums, lower coverage limits, or even application denial.

Treatment History

Having a consistent treatment history can help you obtain more competitive rates. Insurance companies prefer to see steady employment, a consistent treatment plan, and fewer medications or stable medication dosages. Inconsistent treatment records, recent or multiple hospitalizations, and health issues linked to mental health can lead to higher premiums.

Policy Types

If you have certified depression, you may find it challenging to qualify for traditional term or permanent life insurance policies. In such cases, alternative options like guaranteed issue life insurance, which offers low levels of protection without a medical exam, or group life insurance offered through employers, may be worth considering.

Can I be denied life insurance with depression?

Yes, it is possible to be denied life insurance if you have depression. However, it is not a given, and there are many factors that come into play when insurance companies are evaluating your application.

Depression is a common mood disorder that affects how you feel, think, and act. Symptoms range from mild to severe, and insurance companies will want to know the specifics of your diagnosis. When you apply for life insurance with depression, the carrier will want to know the following:

• The type of depression you've been diagnosed with
• The date of the diagnosis and its severity
• If you have a history of suicidal thoughts or attempts
• If you have a history of substance abuse (alcohol or drugs)
• The type of medications you use (if any)
• If you've been hospitalized for the condition
• How you manage your symptoms

Insurance companies are all about risk. If an underwriter determines an applicant has a high risk of premature death, their rates will be higher. Many factors can contribute to the risk of premature death, such as high cholesterol, a history of reckless driving, and severe depression.

Severe depression is a serious condition linked to suicide. All life insurance policies include a suicide clause, which states that the insurance company will not pay out the policy's death benefit if the insured dies by suicide within the first two years of owning the policy.

Yes, you can get life insurance if you have depression. While the diagnosis doesn't automatically disqualify you, depression can affect life insurance costs. The best way to get the best life insurance rates is to apply through a broker.

Yes, there are some cases where you may be denied life insurance if you have depression. Some reasons for this include:

• You apply through a captive life insurance agent whose company is strict with a depression diagnosis.
• You have a documented history of suicidal thoughts or attempts.
• You don't take prescribed medication or have refused treatment.

If you are denied traditional life insurance, there are still options available, such as group life insurance, guaranteed issue life insurance, simplified issue life insurance, and accidental death insurance.

What information will the insurance company want to know?

When applying for life insurance, insurance companies will want to know about your mental health history, including any diagnoses, treatments, and medications. They may also ask about any hospitalizations or impact on your daily life and ability to work. Here is a list of specific information that insurance companies will typically want to know:

• The type of depression you've been diagnosed with
• The date of the diagnosis and its severity
• If you have a history of suicidal thoughts or attempts
• If you have a history of substance abuse (alcohol or drugs)
• The type of medications you use, including the names, dosages, and frequency
• If you've been hospitalized for depression
• If you're receiving psychotherapy treatment
• How you manage your symptoms
• If you have a history of self-harm or panic attacks
• If your mental health affects your daily activities
• If you have a treatment plan and are following it

It is important to be honest and disclose all relevant information when applying for life insurance. Insurance companies will verify the information provided and failure to disclose mental health history can result in higher premiums, denial of coverage, or cancellation of the policy.

What are the best life insurance companies for people with depression?

People with depression can get life insurance, but they may have to pay higher premiums depending on the severity of their condition, their treatment plan, and other factors. The best life insurance companies for people with depression are those that offer competitive rates and favourable underwriting for mental health conditions. Here are some of the top options:

Prudential

Prudential is one of the best life insurance companies for people with mental health conditions, including depression. They offer competitive rates, even for those with moderate or severe anxiety, depression, or bipolar disorder. Prudential has an A+ AM Best rating, indicating strong financial stability, and they received a high score from MoneyGeek for their generous mental health underwriting. They offer both term and universal life insurance options, with term coverage starting at $100,000 for ages 18 to 75. Prudential also has lenient underwriting guidelines for other pre-existing health conditions, making it a good choice for those with multiple health concerns.

Pacific Life

Pacific Life is another excellent option for people with depression. They offer competitive rates for those with mild to moderate anxiety or depression who are taking no more than two medications. Pacific Life has an A+ AM Best rating and high customer satisfaction scores. They offer term, whole, and universal life insurance, with coverage starting at $50,000. However, they lack online resources and an accelerated underwriting process.

Legal & General America

Legal & General America is a good choice for individuals with well-controlled anxiety and depression. They offer preferred rates for those on one medication and preferred plus rates for those not currently on any medication. They provide term and universal life insurance, with term coverage starting at $100,000 for ages 18 to 70. Legal & General America has an A+ AM Best rating and low NAIC complaint indexes for its underwriting companies. However, they may require a medical exam and have stricter guidelines for bipolar disorder and severe depressive episodes.

Brighthouse Financial

Brighthouse Financial is recommended for people diagnosed with attention-deficit disorder (ADD) or attention-deficit hyperactivity disorder (ADHD). They offer competitive rates, comprehensive coverage, and instant decision applications, making them a good choice for those seeking quick approval. Brighthouse Financial has affordable no-exam life insurance options and is known for its best-in-class no-exam policy. However, their traditional term life insurance is not available in all states.

In addition to these companies, it's worth considering working with an independent broker who can help you find the right coverage option and shop around for the most favourable rates. Brokers have contracts with multiple carriers and can advocate on your behalf.

What are the alternatives if I am denied life insurance?

If you are denied life insurance, there are several alternatives to explore. Here are some options to consider:

Review the reasons for denial and consider an appeal:

Understand why your application was rejected and check for any inaccuracies or errors. If the denial was based on incorrect or insufficient information, you have the right to appeal the decision. Contact the insurer to discuss the possibility of an appeal and provide additional information or clarification.

Try a different insurance provider:

Each insurance company has its own underwriting standards, so being rejected by one insurer doesn't mean others will deny you as well. Apply to multiple insurance carriers, and consider working with an independent insurance broker or agent. These professionals work with multiple companies and can guide you towards carriers that are more likely to approve your application. Some brokers and agents even specialize in high-risk clients.

Explore alternative life insurance coverage options:

There are several types of life insurance that don't require a medical exam or have more flexible eligibility criteria. These include:

• Simplified issue life insurance: This option typically involves filling out a brief online application and answering questions about your medical history and health status. The insurer also evaluates your medical records. While death benefits can be lower and costs higher compared to traditional life insurance, simplified issue life insurance has a high approval rate and often provides instantaneous coverage.
• Instant life insurance: Instant life insurance is convenient and easy to obtain. You can apply online, answer health-related questions, and usually receive a decision within 48 hours. Death benefits are typically capped at $1 million.
• Guaranteed issue life insurance: This type of insurance is designed for individuals who have been denied coverage due to health issues. It is permanent life insurance that does not require a medical exam or health questionnaire. Guaranteed issue life insurance is more expensive, has lower coverage limits, and may have a waiting period before a full payout is made to beneficiaries.
• Group term life insurance: Some employers offer group life insurance to their employees, and it is often provided at no additional cost. Since no medical exam is typically required, this option is accessible to individuals with health issues. Coverage may be limited and usually ends when you leave your current employer.
• Whole life insurance: If you were denied term life insurance due to age, whole life insurance could be an alternative. While it is more expensive, whole life insurance is often available to older individuals and provides permanent coverage. It also builds up cash value over time.
• Final expense insurance: If you are primarily concerned about funeral and burial costs, final expense insurance may be a suitable option. It is available to individuals up to 85 years old or older, depending on the provider.
• Veterans Affairs Life Insurance (VALife): Veterans with service-related disabilities may be eligible for VALife, a whole life insurance policy with death benefits of up to $40,000. It begins accruing cash value after two years, and approval is automatic if eligibility requirements are met.

Wait and reapply later:

Making positive lifestyle changes can improve your chances of qualifying for life insurance in the future. Consider giving up risky hobbies or dangerous jobs, quitting smoking, and taking steps to manage any chronic health conditions. Improving your financial situation and credit score can also enhance your eligibility. After implementing these changes, consult your doctor to confirm that your health has improved before reapplying for life insurance.

Frequently asked questions