Life Insurance with Depression or Anxiety

Buying life insurance with any health condition little or big will raise some questions by the insurance underwriter. While not all pre-existing conditions will increase your rates or get your application declined, a history of depression or anxiety disorders in your medical records will result in you being asked other related questions, such as if there have been any suicide attempts, substance abuse, and what treatment options you have used.

In this article, you will find out what the insurance underwriter is interested in knowing, the type of depression they are most concerned with, and the rates you should expect. Let’s take a more in-depth look.

What Is Depression?

We all feel sad or disappointed once in a while, this is a normal reaction to life’s struggles that everyone experiences. However, when this feeling of loss becomes a deep sadness or hopelessness and lasts weeks or even longer, this may be something more than sadness.

There are a few symptoms that constitute depression:

• Feeling of tiredness
• You can’t sleep or sleep too much
• You’ve lost or gained weight
• You think about death or suicide
• You feel worthless or guilty

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What Are the Insurance Companies Looking for When Insuring Individuals with Depression?

Not all depressions are the same. The type of depression, along with the severity, medications you are prescribed, and how long has passed since your last depressive episode will all be reviewed by the underwriter.

Since depression can lead to other health risks, like drug or alcohol abuse and suicide attempts, the level or severity of your depression will play a major role in your policy be issued or denied. Let’s find out what the underwriter will be most interested in when applying for life insurance with depression.

What Type of Depression or Anxiety Do You Have?

Depression is a common (but serious) mood disorder. Mood disorders are the most common form of mental illness in the U.S., affecting more than 40 million adults every year. That is 18.1% of the population! Since this disorder can lead to substance abuse or even suicide among other issues, the stakes are pretty high when the insurance company is underwriting your application.

There are two main categories of depression: major depressive disorder and dysthymia. The type of depression you experience will contribute to your class rating when applying for life insurance.

Major Depressive Disorders

Major depressive disorder (MDD) is divided into depressive disorders (unipolar) and bipolar disorders (manic-depressive). Someone diagnosed with major depression has a history of at least 2 weeks in a depressed state, plus 4 or more of the following:

• Weight change
• Sleep disturbance
• Emotional distress and restlessness
• Fatigue
• A feeling of worthlessness or guilt
• Difficulty concentrating or suicidal thoughts

To be diagnosed with bipolar disorder, at least one episode of mania (a highly elevated state) must be recorded, in addition to the low points of a major depressive disorder.

Dysthymia Disorders

Also called double depression, which includes one or two of the major depressive attributes above. The difference between dysthymia and major depressive disorder is the severity. Dysthymia is a low-grade depression that lasts a few years, while major depression involves a few episodes of severe sadness that come and go, and never completely gets better.

Anxiety Disorders

Anxiety disorders include social anxiety disorder (SAD), obsessive-compulsive disorder (OCD), simple phobia, and post-traumatic stress disorder (PTSD), among others. Symptoms can include:

• Excessive worry
• Irritability
• Sleep disturbance
• Fatigue
• Racing heart, dizziness, sweat, headache
• Trouble concentrating

As you can see, there is an overlap between anxiety and major depressive attributes, with sleep and fatigue being a few of the similar symptoms.

When Was the Last Episode?

How you are managing any health ailment, especially when it comes to mood disorders, is of top interest to the underwriter. If you had your last episode of depression just last week, that may show that your therapy or medications aren’t working.

From the insurance company’s standpoint, it is ideal if it has been at least one year since your last episode. Insurance companies are looking for stability, so the more time that has passed since your last episode, the better it is for you and your rates.

What Medications Are You Taking?

This is another piece of the puzzle the underwriter will try to put together. The medications you take (or don’t take) will also reveal the prognosis of your depression and the severity. Most prescribed drugs for anxiety and mood disorders are antidepressant drugs.

For severe conditions, psychotic agents or electroconvulsive therapy (ECT) may be prescribed. If you currently suffer from anxiety, you may be prescribed benzodiazepines, which can be very addictive, especially for those prone to alcohol or substance abuse.

Bipolar is most often treated with lithium. The medications and dosage you take along with the risk they pose to the insurance company will be evaluated by the underwriter on a case-by-case basis.

Do You Have a History of Substance Abuse (Alcohol or Drugs)?

Depression can lead to drinking too much or using drugs. Often this is because sometimes when people feel so bad, they are trying to find something to make them feel good. From the insurance company’s standpoint, though, these coping behaviors add up to more risk and lead to other health problems (unless you experienced this 5 years ago or longer).

Have You Been Hospitalized or Disabled?

Being hospitalized for a suicide attempt, or being disabled due to your mental condition, unfortunately, shows the insurance underwriter that you are too much of a risk.  Unless this was over 9 years ago, you will be denied coverage and may need to opt for a guaranteed issue life insurance policy instead.

What Other Questions Will the Underwriter Ask?

These are general questions you should be prepared to answer, to both your insurance broker and the insurance company. It’s also worth mentioning that all life insurance companies have different guidelines when it comes to the risks they are willing to take when insuring individuals with mood disorders.

Choosing the right company for your medical history will be the broker’s job.

• Current age
• Gender
• State of residence
• Height and weight
• Income and liabilities
• Occupation
• High-risk hobbies (if any)
• Current and past health history
• Family history
• Foreign travel
• Smoking habits
• Alcohol habits
• Driving history
• Criminal history
• Prescription usage

Related: What do life insurance companies test for in underwriting?

What Rates Class Can I Qualify for If I Have a Mood Disorder?

Please note, these are general assumptions and are discussed as an example only. There are so many moving parts when it comes to buying life insurance with depression, so take it with a grain of salt. Depression is usually categorized by the insurance company as follows:

• Mild depression – typically a situational depression due to a traumatic life event like a divorce, losing a job, or mourning a loved one. If you are on less than two medications and have had no complications or hospitalization, you can get preferred rates.
• Moderate depression – if you have had no hospitalization, electroconvulsive therapy (ECT), or suicide attempts for the last nine years and take 0-3 medications, you can qualify for standard rates.
• Severe depression – significant symptoms including a suicide attempt. You can qualify anywhere from table 4 to being declined. The time that has passed since the suicide attempt and the type of medications you are taking will play a significant role in the decision.

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Life Insurance with Depression Sample Monthly Rates

Case Studies: Life Insurance With Depression or Anxiety

Case Study 1: Term Life Insurance for Mild Anxiety

John, a 45-year-old male, has a history of mild anxiety. He has been managing his condition effectively with therapy and occasional use of prescribed medications. John is in good overall health and has no other significant medical issues. He decides to apply for a 20-year term life insurance policy with a coverage amount of $500,000 to provide financial protection for his family.

After submitting his application and undergoing the underwriting process, John is assigned a Standard health rating. His monthly premium for the policy is $50. Despite his history of anxiety, John’s mild symptoms and effective management allowed him to qualify for a reasonably affordable term life insurance policy.

Case Study 2: Guaranteed Universal Life Insurance for Major Depressive Disorder

Sarah, a 55-year-old female, has a history of major depressive disorder. She has experienced several depressive episodes over the years, which have required hospitalization and medication adjustments. Sarah wants to secure a life insurance policy to ensure financial security for her family.

Given her medical history, she decides to apply for a guaranteed universal life insurance (GUL) policy. She opts for a coverage amount of $250,000 with a policy term that extends up to age 90. Due to her major depressive disorder and previous hospitalizations, Sarah is assigned a Substandard health rating.

As a result, her monthly premium for the GUL policy is $150. Despite her medical condition, Sarah was able to obtain coverage through a GUL policy, albeit at a higher premium due to the perceived increased risk.

Case Study 3: Final Expense Life Insurance for Dysthymia

Mary, a 70-year-old female, has been living with dysthymia, a form of chronic depression, for many years. She wants to secure a life insurance policy specifically designed to cover her final expenses. Mary applies for a final expense life insurance policy with a coverage amount of $15,000.

Given her condition and the specific purpose of the policy, she opts for a simplified issue policy that does not require a medical exam. Mary answers a few health questions on the application, disclosing her history of dysthymia, but she is otherwise in good health.

She is approved for the final expense policy, and her monthly premium is $100. Despite her chronic depression, Mary was able to obtain coverage through a simplified issue final expense policy, which offers a smaller coverage amount and requires fewer medical underwriting requirements.

Bottom Line

So here you go – this is the type of questions an insurance agent should ask if you have a history of depression or anxiety. Make sure you are honest about your condition with both your agent and the insurance company so that he/she will be able to recommend the best route.

If you are suffering from mild anxiety or depression, go ahead and run the rates on this page and choose the regular health table.

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