Life Insurance with Depression

Finding affordable life insurance when you have a history of depression can be a challenging and complex process. Most consumers understand that life insurers rate according to age and health, but many do not consider the mental health aspect of underwriting. Underwriters are likely to question you about your mental health and your parents’ mental health.

Because we know that depression is a very common mental disorder in the U.S., we should have an open discussion about how a history of depression can impact your life insurance rates.

Depression Statistics for the U.S.

Depression in the U.S. is tracked by the National Institute of Mental Health (NIMH) and they consistently update their statistics and other information that many may find alarming. Here is what we know about Major Depression.

Major Depression is a very common disorder throughout the United States and can result in serious impairments that will ultimately have an impact on a person’s ability to carry out important life activities.

Prevalence Among Adults – According to SAMHSA, major depressive episodes among adults in the U.S. are substantial:

• Over 16 million adults had at least one major depressive episode which represents about 6.7% if all adults in the U.S.
• The frequency of major depressive episodes was highest among adult females compared to adult males (8.5% vs 4.8%)
• The age group affected most by major depression is the 18 -25-year old age group with 10.9%.

Depressive Episodes Resulting in Impairment Among Adults

• Over 10 million adults in the U.S. who are 18 or older had at least on major episode accompanied by severe impairment.
• In 2016, of the adults (18 or older) who experienced a major depressive episode, at least 64% had a severe impairment.

Treatment for Depression in the U.S.

The treatment for adults with depression typically includes medication, therapy, or a combination of both, but of all the adults who reported a major depressive episode, 37% did not receive any treatment. The most common medications prescribed for major depression are:

Although the list of medications for the treatment of depression is a long one, the most common drugs prescribed to treat and reduce the symptoms of depression are:

All of these drugs may have certain side-effects that should be reported to your physician.

Depression and Life Insurance

Your life insurance rates will be influenced by a number of aspects, most importantly your health class, your age, and the severity of your depression. If you have been declined for life insurance in the past because of depression, that might have an impact on any new applications you submit to another insurer.

Getting turned down for life insurance because of depression happens more frequently than you might think, but only applicants with severe depression, recent hospitalization, co-occurring mental health issues or chronic diseases are most likely to be.

Considering that almost all life insurance rates are established after a thorough underwriting process during which the insurance company determines your level of risk, any issue related to depression will likely arise during this process.

Some of the questions you can expect from the underwriter include:

1. What kind of depression were you diagnosed with?
2. Approximately when was your first episode?
3. When was your last episode and did you seek treatment from a medical professional?
4. What treatment protocol are you currently following?
5. Is your treatment causing any side effects?
6. Have you been hospitalized because of depression?
7. Have you ever attempted suicide or are you having thoughts of suicide?

Common forms of Depression

After years of continuous study, the National Institute of Mental Health lists the following types as the most common:

7 Most Common Types of Depression

Major Depressive Disorder (MDD)

Persistent Depressive Disorder

Bipolar Disorder

Postpartum Depression

Seasonal Affective Disorder (SAD)

Premenstrual Dysphoric Disorder (PMDD)

Atypical Depression

How will Depression Affect my Life Insurance?

Depending on the insurer, the effect that a history of depression will have on your life insurance rates will range from minimal to decline. Although we’d like to provide a specific answer to this question, there are just too many variables that can influence what rate class you’ll be assigned in and the ultimate rate of your insurance policy:

• Which type of depression do you have (mild, moderate, or severe)?
• What type or types of medications are you taking and what type of side-effects are you experiencing if any?
• When were you diagnosed?
• Have you had suicidal thoughts or attempted suicide?
• Is there a history of depression in your family?
• Have you been hospitalized because of depression?

Depending on your answers to all of the underwriting question asked by the insurer, we can list some possible outcomes:

Possible Outcomes if Fully-Underwritten

Best Case: Preferred Rates are Possible

Typical Case: Standard or Standard Plus

Worst Case: Declined if attempted suicide

These outcomes assume a non-smoker and no other serious health issues.

Possible Outcomes if No Medical Exam

Best Case: Rated due to anxiety or situational depression

Worst Case: Declined if there is hospitalization, Lithium, Haldol, or Thorazine

What if I’m Declined?

If you are declined life insurance coverage as a result of your depression or any other health issue, do not despair. Your insurance professional represents multiple highly-rated insurance companies who will offer you a “guaranteed issue” insurance policy.

The guaranteed issue policy will be priced higher than traditional insurance because the insurer will not take your health into consideration for issuing a policy. This means that as an unknown risk, your insurance company is entitled to charge a higher rate.

You will also have a waiting period of two or three years before your policy will pay the full death benefit if you die from natural causes (accidental death is covered from the first day). Typically when this happens, the insurer will pay your beneficiary the sum of all premiums paid to the insurance company and an additional 10 percent. Once your waiting period has expired, your policy will pay the full death benefit no matter the reason.