The Impact of Anxiety on Life Insurance

Anxiety disorders are the most common mental illness in the U.S., affecting approximately 40 million American adults.

Anxiety can affect many aspects of your life. including your ability to get a job or engage in social situations. It can also make you more prone to other serious health issues such as depression, eating disorders, substance abuse, fibromyalgia, panic attacks, and high blood pressure.

Because anxiety can have a major impact on both your physical and mental health, life insurers typically treat anxiety as a very serious disease, similar to heart disease or other physical ailments that may shorten your lifespan. As a result, having anxiety can make it more difficult to get approved for life insurance coverage — and can also affect what you’d pay for an insurance policy.

Different insurers have different guidelines for how anxiety impacts your ability to get covered, so it’s imperative to shop around if you want to get life insurance to protect your loved ones in case of your death.

The good news is almost everyone can find at least some coverage even with anxiety. You just need to understand your options and choose the right policy for your situation.

On this page:

• Getting Life Insurance with Anxiety
• How to Get the Best Insurance Policy

Getting Life Insurance with Anxiety

Whenever you apply for a life insurance policy, insurers aim to determine the likelihood you’ll pass away during the time your coverage is in effect. To help insurers assess the risk, you’re usually required to answer some detailed questions about your health. You may also be required to undergo a medical exam and, sometimes, a mental health examination as part of the application process.

Life insurance applications ask about mental health conditions, including anxiety, as well as physical health ailments. You need to answer these questions honestly and completely because if you don’t, the insurer could find out later and your policy could be canceled or your loved ones could receive a reduced death benefit. This means disclosing you have anxiety is imperative.

The Underwriting Process

The process life insurers go through in assessing your risk of death while covered is called underwriting. Life insurance underwriting involves professional risk analysts looking at your medical history before using available statistics and information to assess what that medical history means for your future lifespan.

Since anxiety has been shown to cause serious health issues that increase the risk of death — such as depression, high blood pressure, and sometimes suicidal ideation — there’s no question that anxiety will have an impact on your risk analysis.

The questions you’ll need to answer during the underwriting process not only aim to determine if you have any diagnosed medical conditions, but also if you have undiagnosed physical or mental health problems. 

Even if you don’t have an official diagnosis of anxiety in your medical records, you will still need to be honest about your symptoms when answering questions. This can complicate the underwriting process since it’s harder to assess how undiagnosed anxiety will affect your future health.

Undiagnosed anxiety generally raises very serious concerns for insurers because your condition isn’t being managed. It’s important you have a diagnosis from a medical professional so you can get the treatment you need to help control your anxiety and show life insurers you’re taking steps to stay healthy.

Dangers of Lying About Your Anxiety Diagnosis During the Application Process

It may seem tempting to lie about your anxiety on your application for life insurance, especially if you’re experiencing symptoms but haven’t yet been diagnosed. After all, if you lie about your medical issues, you won’t appear to present a higher risk, so your premiums would likely be lower.

But trying to save money or increase the chances of getting covered by lying about your anxiety is a really bad idea for a few key reasons:

• The insurer may find out about your anxiety later, especially if you’re required to undergo an exam during the underwriting process.
• If the insurer discovers your anxiety, your application can be denied if you haven’t been approved for coverage yet.
• If your anxiety is discovered later, your insurer could cancel your coverage or raise your insurance premiums.
• Your insurer could also reduce the amount of death benefits paid out if anxiety is discovered later. They could also refuse to pay your death benefit altogether on the grounds you committed fraud when you applied for coverage.

Lying on a life insurance application is simply not worth the risk. It’s much better to be honest and pay appropriate premiums so you can make sure the coverage you have will actually provide for your loved ones if something happens to you.

Questions They Will Ask

While every insurance application differs slightly, there are some common questions you can expect to see when you apply for coverage. Some of the questions you’re likely to encounter include:

• When were you diagnosed with anxiety? If you have managed your condition well for a long time, it may be less concerning to the insurer than if you were recently diagnosed and it’s not yet clear what long-term impact the condition will have on your health.
• What was your diagnosis? There are five major types of anxiety disorders: generalized anxiety disorder, obsessive-compulsive disorder, panic disorder, post-traumatic stress disorder, and social phobia. Not all types of anxiety are considered to present the same level of risk, so your insurer will likely want to know what specific condition you have.
• Are you taking any medications to control your anxiety? Medications can help alleviate symptoms of anxiety and reduce risk factors. Being on medication also shows you’re taking a proactive approach to manage your condition. If you’re taking medications or undergoing therapy, your insurer may not view your anxiety as presenting as much risk as it would if you aren’t receiving treatment.
• Have you ever had a suicide attempt? Studies have repeatedly shown that a person who attempts suicide will try again. In fact, an analysis of multiple studies that examined successful suicide attempts found that one of every 25 persons who had made a prior suicide attempt had a fatal reattempt within the next five years. As a result, a suicide attempt is a major red flag to insurers that will make it much more difficult for you to be approved for insurance coverage.

Be forthcoming and detailed with your answers even if it’s uncomfortable to reply to these questions. Your medical records will reveal the truth, and you don’t want to be caught providing incomplete information that could be construed as fraud.

The Outcome

During the underwriting process, the insurer will determine what risk category you fall into and whether you qualify for the best rates. The three risk tiers you could fall into are:

• Preferred best: This is the best category to be in because it means you present the lowest risk. You’ll be approved for coverage with virtually all insurers and your premiums will generally be very low.  
• Standard: There are actually two levels of standard risk: standard plus or standard. Standard plus applicants are generally in good health, but a specific medical issue or lifestyle factor prevents them from being awarded the preferred best classification. Standard plus applicants should still be approved for coverage at competitive rates, though. A standard risk tier, on the other hand, is assigned to people who are of average health. Coverage is still available from most insurers, but premiums will be a bit higher.
• Table-rated: Applicants for life insurance with one or more serious health issues or other risk factors will be table-rated. This means you’re assigned a rating (a letter or number) and each additional letter or higher number will result in a premium increase. For example, if you get a table rating of “A,” you may pay 25% more than the standard premium price. If you have a “B” rating, you might pay 50% more, and so on. Eventually, your table rating will be so high that premiums are prohibitively expensive and getting term life insurance coverage becomes impossible.

Not everyone with anxiety will be table-rated. Different insurers have their own guidelines for how much risk your anxiety diagnosis presents alongside your overall health history.

How to Get the Best Insurance Policy

Managing Your Anxiety Disorder

Anxiety tends to present the biggest overall risk to your health when it’s not well-controlled, if you can prove you’re effectively managing your condition, however, anxiety won’t have as big an impact on your life insurance eligibility or premium prices.

You can demonstrate your anxiety is being properly managed by:

• Providing information on your treatment history, including medications you’re taking and therapeutic treatments you’re receiving
• Complying with all of your doctor’s recommendations for treatment

If your anxiety has been well-controlled for a long time, it’s possible you could even qualify for a standard rating, standard plus, or even preferred best. Controlling your anxiety will benefit your overall health, of course, in addition to maximizing your chances of finding affordable insurance coverage.

Managing Your Health

Insurers not only consider your anxiety but also the big picture. If you come off as generally low risk because you’re otherwise healthy, anxiety will have much less of an impact on your ability to get covered at affordable rates than if you have anxiety alongside other health problems. This means you can help ensure you’re approved for coverage with reasonable premiums by:

• Maintaining a healthy weight
• Exercising regularly
• Eating a healthy diet
• Avoiding high-risk activities such as skydiving or scuba diving
• Not smoking
• Visiting the doctor regularly and getting good preventative care

If you do all these things, your application and the examination you undergo when you apply for insurance will reveal your other healthy habits to the insurer. If you’re healthy overall, you can hopefully be seen as low-risk even with an anxiety diagnosis.

Shop Around

There are tons of different life insurance companies out there, so it’s important to get quotes from multiple insurers to make sure you’re getting the coverage you need at an affordable price. This is especially true when you have anxiety or other health conditions, as different insurers will view medical issues differently in the underwriting process.

The good news is it’s easy to shop around online. You can get quotes from multiple insurers and can compare premium prices in minutes. Just be sure you’re comparing apples-to-apples — in other words, compare premium costs using the same amount of coverage.

If you find you’re having difficulty qualifying for standard term life insurance because of your anxiety or other health issues, you may also wish to look into alternatives such as guaranteed issue life insurance or graduated death benefit policies.  

• Guaranteed issue life insurance policies will approve you for coverage regardless of your health status. While the maximum death benefit is usually lower than for standard term life insurance, you’re able to at least obtain some coverage from a guaranteed issue policy when no other options are available to you.
• Graduated death benefit policies will provide the full death benefit only after you’ve been covered for a certain number of years. For example, your beneficiaries might receive 25% of the benefit if you pass away after a year of coverage, 50% after two years, 75% after three years, and the full death benefit after four years. Since you don’t get the full death benefit right away, these policies are less risky for insurers and getting approved may be easier.

You should always start shopping by getting several life insurance quotes from the best term life insurers, since this can provide the most coverage at the most affordable prices. But if you find your applications are repeatedly denied or the premiums are too high for you to pay, you can consider looking into these other solutions.

When you’re shopping around, you also want to make sure to read the fine print on any policy you consider. Find out if there is a waiting period before the death benefit is paid or if any particular causes of death are excluded from coverage.

Bottom Line

Buying life insurance coverage is always worthwhile if you have loved ones who depend on you to provide them with income. You don’t want to leave your loved ones unprotected and facing financial hardship if something happens to you.

You don’t have to let an anxiety diagnosis affect your ability to obtain coverage and protect your family in case of your untimely death. There are plenty of life insurance companies that won’t consider anxiety as a disqualifying condition or even a major risk factor — especially if it’s well-managed.

By taking the time to find a policy that’s affordable and comprehensive enough to pay out the death benefit your loved ones need, you’ll have one less big thing to worry about.