Anxiety's Impact: Life Insurance And Mental Health

Having anxiety can affect the process of buying life insurance, but it doesn't automatically disqualify you from getting it. Many insurance companies will offer cover for mental health conditions, including some of the UK's top companies like AIG, Vitality, and Aviva. However, some insurers are more understanding of mental health conditions than others, so it's important to explore all your options before making a decision. The cost of life insurance with an anxiety disorder depends on the risk class you're assigned, which is determined by the underwriter's evaluation of your medical records and the application.

Anxiety diagnosis and treatment

Anxiety disorders are quite common, and many people with anxiety are able to successfully apply for life insurance. The first step is to get a diagnosis from a doctor, who will be able to recommend an effective treatment. This will also help when it comes to applying for insurance, as insurers will often ask for details of your diagnosis and treatment.

Diagnosis

If you think you may have anxiety, it's important to seek professional help. A doctor will be able to diagnose your condition and recommend treatment options. They may ask you a series of questions to understand your symptoms and how they are affecting your life. These questions may include:

• When did you first start experiencing symptoms?
• What are your symptoms?
• How often do you experience symptoms?
• Have you had any suicidal thoughts or self-harming behaviours?
• Are your symptoms triggered by specific events?

Treatment

There are various treatment options available for anxiety, and the right treatment for you will depend on your individual needs. Treatment options may include:

• Medication: Your doctor may prescribe medication to help manage your symptoms. Common medications for anxiety include Prozac, Wellbutrin, and Klonopin.
• Therapy: Cognitive-behavioural therapy (CBT) is often recommended for anxiety. This type of therapy can help you identify and change negative thought patterns and behaviours.
• Lifestyle changes: Making healthy lifestyle changes can also help manage anxiety. This may include regular exercise, stress management techniques, and improving sleep habits.

It's important to follow your treatment plan and attend any recommended therapy sessions or medical appointments. This will not only help improve your symptoms but will also demonstrate to insurers that you are taking an active role in managing your anxiety.

Anxiety and insurance premiums

Anxiety is a common mental health condition that affects a person's mood, thinking, and behaviour. It can range from mild to severe and may include physical symptoms such as restlessness, dizziness, and heart palpitations. For individuals with anxiety, purchasing life insurance can be a challenging process, but it is not impossible. Here's what you need to know about how anxiety can impact your insurance premiums and options for obtaining coverage:

Impact on Insurance Premiums

Having an anxiety disorder can affect your life insurance rates, but it doesn't automatically disqualify you from obtaining coverage. The impact on your premiums will depend on several factors related to your condition:

• Severity and Treatment: The cost of life insurance is determined by the risk class assigned during the underwriting process. If your anxiety is well-controlled with treatment and considered low risk, you may qualify for preferred or standard risk categories, resulting in lower premiums. However, more severe or uncontrolled anxiety may lead to higher risk classifications and increased premiums.
• Medical History: Insurance companies will typically ask about your diagnosis date, treatment methods, symptoms, and their impact on your daily life. They may also inquire about any history of substance abuse, as this is a significant concern for underwriters. Providing detailed information about your condition and treatment can help underwriters assess your risk more accurately.
• Comparison Shopping: Different insurance companies have varying underwriting guidelines for anxiety. Some companies may offer more favourable rates for individuals with anxiety, while others may be less accommodating. It is essential to compare quotes from multiple insurers, as rates can vary significantly.
• Age and Other Factors: Age is a critical factor in determining life insurance costs. Premiums tend to increase with age, so purchasing coverage at a younger age can result in lower premiums. Additionally, factors such as smoking status, weight, and other pre-existing conditions can also influence your premiums.

Tips for Obtaining Coverage

• Apply Through a Broker: Brokers, such as Quotacy, are not tied to a single insurance company and can shop the market on your behalf. They can help you find insurers that are more understanding of mental health conditions and increase your chances of obtaining affordable coverage.
• Be Transparent: When applying for life insurance, be transparent about your anxiety diagnosis and provide detailed information about your condition. Non-disclosure of pre-existing conditions can lead to issues with insurance claims in the future.
• Seek Specialist Support: Consider working with a mental health life insurance expert or an independent insurance broker specialising in medical conditions. They can guide you through the application process, answer distressing questions, and help you find the best rates and insurers suited to your specific circumstances.
• Compare Insurers: Not all insurers treat anxiety diagnoses the same way. Some may offer more competitive rates or be more flexible with their underwriting guidelines. Comparing multiple insurers will help you find the most suitable coverage at a fair price.
• Prepare Medical Documentation: Having a doctor's report or a letter explaining your condition in detail can be advantageous. It provides insurers with accurate information about your diagnosis, treatment, and current state of health, enabling them to make more informed decisions.

Non-disclosure of anxiety

When you make a medical claim, insurers will investigate your medical history in more detail than they did at the application stage. However, an insurance company cannot access your medical records without your permission.

If you have indicated that you have suffered from anxiety, all insurers will ask whether you have had suicidal thoughts. They will also want to know about the date of your diagnosis, how your condition has been treated, your doctor's details, your symptoms and when you last experienced them, details of any inpatient treatment, and whether you have taken time off work because of your condition.

If you fail to disclose any of this information, your insurer may decide that you are guilty of non-disclosure and your claim may be rejected. Therefore, it is important to be as transparent as possible when applying for insurance and disclosing any pre-existing medical conditions, including anxiety.

Anxiety and critical illness insurance

Critical illness cover is usually available for people with anxiety, and it can be a great way to provide extra financial protection for your family. Being diagnosed with a serious medical condition is often a frightening experience and can have a massive impact on your life. Critical illness insurance will pay out a cash lump sum if this happens, so that you and your loved ones don’t also need to worry about money during such a difficult time. Policies can pay out thousands to support you with important bills like mortgage or rent payments, so you can focus on your health and your family.

However, despite an increase of 2.4% for sick days caused by mental health issues, many critical illness insurers do not include mental health illnesses within their policy. Valuing mental health in the same way that we value physical health is high on the UK Government’s mental health agenda, yet many of those facing a deterioration in their mental or emotional state still face issues when trying to find critical illness protection.

You may find that a handful of insurers are willing to provide financial protection for mental health sufferers, however, it’s likely that only very specific conditions are included. Most critical illness insurers only pay out in instances of permanent or life-threatening illnesses and, because many people still classify mental health as ‘manageable or curable’, it can be difficult to make a successful claim.

If you are able to get critical illness cover for your anxiety, the amount of income protection providers that include mental illnesses within their policy tends to be higher than the amount of critical illness cover insurers.

If you have anxiety and are considering critical illness insurance, it is recommended that you speak to a life insurance specialist who can use their extensive knowledge to ask the right questions and approach the most suitable insurance company based on your answers.

Anxiety and income protection insurance

Income protection insurance is a policy that pays out to you in monthly instalments if you become unable to work due to injury or illness, be it physical or mental. This can be extremely helpful in reducing financial stress, which is known to worsen the symptoms of mental health conditions. Income protection insurance can cover between 50% and 70% of your income until you are fit to return to work or until your policy period ends.

Anxiety is a common mental health condition, with around 1 in 6 people in the UK experiencing symptoms of anxiety or depression each week. If you are living with anxiety, it is highly likely that you will be able to obtain income protection insurance. However, if you are currently living with anxiety or have experienced it in the past, this will be classed as a pre-existing condition, and some providers may exclude this from your cover.

Applying for Income Protection Insurance with Anxiety

When applying for income protection insurance with anxiety, it is important to be transparent about your condition with the insurer. It is also a good idea to secure a copy of your GP's notes and check them for any errors. You will likely be asked detailed questions about your condition, such as when you were first diagnosed, what treatments you are undergoing, and how your anxiety affects your daily life.

Cost of Income Protection Insurance with Anxiety

The cost of income protection insurance with anxiety can vary depending on the insurance company. However, it is often possible to obtain cover with little or no increase in price, especially if your symptoms are mild and well-treated. Shopping around and comparing quotes from multiple insurers can help you find the best price.

Income Protection Insurance Payout for Anxiety

If you are unable to work due to anxiety, it is likely that your income protection insurance policy will pay out, provided that you meet the definition of incapacity listed in your policy and are unable to work for longer than your deferred period. However, if anxiety has been excluded from your policy as a pre-existing condition, you will not be able to claim for this reason.

Frequently asked questions