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Depression and life insurance
Mental illness is becoming more prevalent among Americans, and could affect your ability to get coverage.
A life insurance policy can help your family take care of expenses and lost income if you die unexpectedly. A history of depression can make it more difficult to get insured, but it is still possible.
Counseling services for people suffering from depression
- National Suicide Prevention Lifeline. Call 800-273-8255 at any time, 24/7, if you’re experiencing a mental health crisis.
- SAMHSA’s National Helpline. Call 1-800-662-4357 at any time, 24/7, for information on mental health services. Counselors are available in both English and Spanish.
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- Get the coverage amount and term that's right for you.
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Key Facts
Depression is an increasingly common mental illness, and the CDC estimates that one in six Americans will experience depression at some point in their lives.
How mental illness is treated by insurance companies varies extensively between providers in terms of when a benefit will/won’t be paid and whether or not coverage will be provided. It can be worth speaking with an insurance consultant to help you find coverage, but generally:
- Applicants who have had mild depression and have fully recovered for at least 1-2 years can expect standard premium rates.
- A loading, or percentage increase in premium, may apply for serious or ongoing cases of depression.
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Life insurance vs. critical illness insurance
There are two different types of insurance that are often grouped together under the umbrella term of “life insurance.” Actual life insurance pays out a lump sum when you die. Critical illness insurance, which can be purchased independently or added on to a life insurance policy, pays out a lump sum if you’re diagnosed with a serious medical condition.
Depression is often not covered on critical illness insurance policies, meaning the policy won’t pay out if you become seriously depressed and are unable to work. Some insurers argue that it’s easy to fake and difficult to define and diagnose definitively. To find out if you’re covered, you’ll need to read your policy.
While people with depression can often qualify for a life insurance policy, many insurers will list suicide as an exclusion, meaning they aren’t required to pay out the benefit if the policyholder committed suicide.
How is depression assessed by insurance companies?
Should you be eligible for cover, insurance providers will generally draw up different life insurance terms for you based on their company policy. If you’re considered low-risk — which usually applies to people with a mild history of depression, one or no medication and no hospitalizations — you’ll be able to get a policy at a competitive rate. If you’re considered medium risk, you may have to pay a higher premium or agree to a shorter term. High-risk applicants can be denied insurance, particularly if there are other health risks.
Taking out insurance if you have a history of depression requires:
- Compliance. If you’ve been prescribed medication or therapy, you’re more likely to be approved if you can show that you’ve been following your doctor’s orders. A history of noncompliance is likely to result in a denied application.
- Complete medical record. Your insurance company will want to know what medications you’ve tried, how many medications you’re currently on, whether you’ve ever been hospitalized and whether you’ve experienced physical side effects from depression or been diagnosed with an associated illness.
- Honesty. It’s important that you disclose anything that might impact your insurance policy. Failure to disclose such details might lead to your ineligibility during claim time.
What type of questions will my insurer ask?
Be prepared to answer these questions:
- What are your symptoms of depression?
- Have you been diagnosed with any other mental illness?
- When did you first experience symptoms and did they happen as a result of something specific?
- Have depression symptoms forced you take time off work or impacted your ability to perform work duties?
- How many episodes of depression do you experience and how long do they typically last?
- Have you received treatment for this condition? If so, what type?
- Are you still receiving treatment? If not, what was the last date of treatment?
- Have you been hospitalized as a result of depression?
- Have you contemplated or attempted suicide?
- Is there a history of depression in your family?
Bottom line
As doctors learn more about depression, insurers are becoming more knowledgeable and it’s becoming easier to get coverage. Any history of mental illness can make it more difficult to get qualified for a life insurance policy, but most people with controlled depression can get coverage.
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