Is Depression a Life Insurance Risk?

Policy applicants typically don’t realize that life insurers are as concerned with their mental health as they are their physical health. Life insurers sometimes view a history of depression, anxiety, and/or other mental illnesses as a risk factor. The reason for this is that almost all mental illnesses are associated with elevated mortality rates, which increases the likelihood that the insurance company will have to pay out a claim. However, insurers do not view all types of mental illness as equally risky. Some people with a history of chronic stress may still quality for the best rates if their illness met certain conditions. We’ll explain how insurers evaluate depression as a risk in what follows.

Mortality Rates

The main concern of providers in issuing coverage to applicants with chronic stress or a history of mental illness is that they will eventually commit suicide. Most policies must pay benefits after two years if the insured commits suicide. Considering that about 2%-9% of depressed patients commit suicide, life insurers’ concern is justified. If you have a suicide attempt in your past, you will probably not qualify for coverage for at least one to two years. In addition to the suicide risk mental illness represents, it also affects areas of the body like the cardiovascular system, which also increases the risk of death.

Types of Mental Illness

Providers do not regard all forms of disorders in the same way. For example, if you experienced a brief bout of anxiety, took medication, and responded well to treatment, there is a good chance you can still qualify for preferred rates. How successful your treatment was, whether psychotherapy or pharmacological interventions, is a critical factor in determining your insurance risk. Insurers are especially lenient with reactive depression, or stress that resulted from a stressful life event, such as a divorce or the death of a loved one. On the other hand, chronic depression that is unresponsive to treatment and unrelated to events is usually more of a red flag for life insurers. If you’ve been hospitalized for chronic stress in the past, you may have an especially hard time finding affordable coverage.

Finding Coverage

If you have or have had chronic stress and need coverage, the best strategy is to be honest and open with your provider about your condition. Provide thorough records of your treatment up front and be candid about the nature of your condition. Your provider will find out about the details of your illness one way or another, so be honest from the beginning. Don’t be afraid to provide your treatment records–an insurer is much more likely to provide reasonable rates after thoroughly reviewing records rather than having to guess at the severity of your condition.