Depression is a serious mental health condition that is more common in the United States than many think. According to the National Institute of Mental Health, 16.5% of U.S. adults have suffered from depression at least once in their lives.
The severity of depression among individuals with the condition can vary wildly. While some may only experience symptoms occasionally and connected to specific life events, others have to manage it for their entire lives in often crippling fashion.
And as if struggling with depression was not enough of a burden, many individuals with the condition also report having trouble receiving life insurance for reasonable premiums. Insurance companies may be hesitant to approve policies for these individuals, worrying that the condition will impact the life expectancy of potential clients. If they do approve a policy, the premiums tend to be higher.
Fortunately, if you are or have suffered from depression in your past, you are not necessarily bound to live without life insurance or paying unreasonable premiums. In fact, you can still take steps to ensure that you receive the same life insurance as your peers. Life insurance is still attainable for individuals with the disease, as long as you know just what insurers are looking for, what what steps you should take to receive premiums that you can afford.
Why Depression Matters to Life Insurance Companies
First, it’s important to understand just why your depression even matters to insurance companies. They know that in the worst cases, depression can shorten life expectancy, which they consider an added risk for their policies. Of course, the choice of word here is on can, not will – studies on the subject can not say with certainty whether that is actually the case.
But the mere possibility of a shortened life expectancy is enough for insurance companies to tread lightly when the subject of depression comes up and an individual with the condition applies for a policy. Depression, especially in its most severe form, is considered a mental illness, which is why they treat it as a pre-existing medical condition. That, in turn, has the potential to significantly impact your insurance rate.
Of course, simply suffering from depression does not mean all is lost and that you can no longer receive life insurance. In fact, you are not even guaranteed to pay higher premiums than your peers who do not suffer from the condition. But it does mean that life insurance companies scrutinize your application more closely than they would for individuals without pre-existing conditions, factoring in the following variables:
What Underwriters Consider When Determining Premiums for Individuals with Depression
More specifically, insurance agents go through a variety of steps to determine your potential premium if you suffer fom this disorder. To determine the severity and potential future impact of your condition, they will look at a variety of factors connected to it, which often include:
- How old you were when diagnosed with depression
- The duration and severity of your depression
- Whether the depression is chronic, or was tied to a specific life event (such as death of a loved one)
- What and how many medications you use to battle depression
- How often you take these medications
- Whether you have attempted or thought of suicide
- Whether you have ever been hospitalized as a result of the illness
- Whether you have any history of or current problems with alcohol or substance abuse
- Whether you have become or are in danger of becoming disabled as a result of depression
- Whether you have any other major health problems that could be related to depression
Naturally, some of these questions can have a major impact on your ability to get insured. Life insurance companies use the above questions to determine the exact severity of your condition, and estimate just how much it will impact your life in the future.
For your insurer, it’s a simple cost-benefit analysis: are you at such health risk that your insurance is likely to pay out before you have paid its full amount in premiums? They will be more hesitant to give out reasonable premiums to individuals whose life may be at immediate risk due to depression.
On the other hand, don’t underestimate the fact that some of these questions may actually help your case as well. If your depression was tied to a traumatic life event and has since improved, or if you only take one medication intermittently to manage your symptoms, your chances of receiving a reasonable premium for your life insurance improve dramatically. Even if you simply have never been hospitalized in a depression-related event, your likelihood of being approved increases.
Steps You Can Take To Receive Life Insurance at Reasonable Premiums
Considering the information above, it becomes clear that many life insurance companies prefer to handle depression on a case-by-case basis. Depending on the severity of your condition, and your health independent of the depression, you may still be able to get insured without paying unreasonable amounts of money. Still, when applying for life insurance while suffering from depression, here are some steps you should take to give yourself the best chance of reasonable premiums:
- Be Honest. Never try to hide your depression or its severity. Instead, be honest about your history with the conditions along with the steps you take to manage it. Doing so will help to show the control you have over your depression, which bodes well for the future estimation your underwriter makes. In addition, your insurance company can and will do research into the truth of your statements, so hiding any potential complication factors will only worsen your case.
- Document Your History Clearly. The more clearly you can show your past treatments, medications, and successes with the condition, the more likely you will be to receive reasonable premiums. Just as being honest does, it shows your underwriter that you have control of your disorder, and are taking the necessary steps to ensure that this control will remain the case in the future.
- Know Your Options. Not every insurance company will treat your depression the same way. Some may use your personal information as the main driving force behind determining your rate, while others use actuary tables to determine at least the basis of the premiums more generally for all individuals with depression. Most underwriters probably use a combination of both. As a result, your premium may vary significantly based on the individual underwriter.
- Get Expert Help. Considering the sometimes complex process that is getting life insurance while suffering from depression, it may be in your best interest to work with an expert on the subject. Working with an independent expert on the subject allows you to ensure that you get the best possible rates for your life insurance, which just may be more affordable than you thought possible.
Suffering from depression is difficult enough. The last thing you need in your life is added stress because you cannot get life insurance, or because the premiums are too high to be affordable for you. If you are looking to get life insurance but are worried about the process, contact us. We’d love to work with you to get you the premiums you can afford for the life insurance you need.