How to Get Life Insurance With Depression
A history of depression can make buying life insurance more difficult and more expensive. However, you can still get covered—you just need to shop around for the right policy and be prepared to provide details on your medical history.
Buying life insurance, whether it’s term life insurance, universal life insurance or another type of policy, helps you to protect your loved ones in case something happens to you.
Unfortunately, purchasing a life insurance policy can become more difficult if you have a history of physical or mental health issues. You may discover this as you’re working with life insurance companies and getting life insurance quotes.
Clinical depression is one health problem that can affect both your ability to obtain coverage and your costs of coverage for Americans. In some cases, insurers will deny you a policy altogether due to depression, while in other circumstances insurers may charge you more because of your mental health issue.
On this page:
- How Life Insurance Factors In
- How Does Depression and Mental Illness Influence the Cost of a Life Insurance Policy?
- What Are the Best Policies for People With Depression?
How Life Insurance Factors In
One question people have is whether or not they can get life insurance with depression. If someone struggles with depressive disorder even if they are able to get coverage they may wonder what their life insurance rates will be.
The impact of depression and depression history on your ability to obtain insurance coverage will vary based on many factors, including how severe your depression is, how long you have been a depression sufferer, and treatments you’re currently undergoing or have received in the past.
For example, someone with a documented history of suicidal thoughts or major depressive disorder could have a more difficult time obtaining coverage or getting the best rates.
In most cases, people with a diagnosis of depression can still get life insurance—and often at affordable rates. You just need to know how to maximize your chances of obtaining a policy and need to be smart when shopping around among different insurers to get the right coverage.
How Does Depression and Mental Illness Influence the Cost of a Life Insurance Policy?
Depression influences the cost of a life insurance policy because a diagnosis of depression makes you appear to be a higher risk to insurers.
Insurance companies want to limit the risk of actually having to pay out on a policy. Car insurers, for example, prefer to insure safe drivers who aren’t likely to get into an accident, while life insurers want to insure people who are less likely to die while the policy is in effect.
Insurers determine the risk level during the insurance application in a process called underwriting. Life insurance underwriters look at all of the information available, such as your age, gender, family health history, lifestyle choices, and current health status. All of these factors are evaluated to determine how likely it is that you will pass away and the insurer will have to pay out the death benefit.
Because people suffering from depression and certain other mental health issues have been shown to have a higher mortality rate, underwriters may deny coverage to someone with severe depression, or the insurer may decide to charge you much higher policy premiums because you’re considered high-risk.
It is not just depression that can impact your ability to find affordable life insurance. Any type of physical or mental health issue can make it more difficult to find coverage at all or obtain a policy with affordable premiums. This includes severe anxiety, bipolar disorder, post-traumatic stress disorder (PTSD), and schizophrenia.
The more severe your mental health condition, and the more likely it will lead to your death, the more difficult it will be to get covered. This means if you have a history of suicide attempts or have been hospitalized with severe depression, you’ll have a much harder time getting a policy than someone with only mild depression that’s well-controlled by medication.
What Are the Best Policies for People With Depression?
Most people with depression can qualify for a standard life insurance policy, albeit at a higher premium than someone with no history of mental illness. If your depression is well managed, you may even be able to get a policy at rates similar to those without a diagnosed mental illness. Shopping around for affordable coverage and working with an insurance agent can be helpful to find a policy that is right for you.
If your depression is severe, not well-controlled with medication, has led to hospitalization, or has resulted in suicide attempts in the past, obtaining a standard policy will be much more challenging, and many insurers will likely deny you coverage. However, you still have options.
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Some life insurance policies are guaranteed issue, which means you can get covered regardless of what’s in your medical history. These policies usually cap coverage at a relatively low amount, but they can still provide funds for your family in the aftermath of your death. If you can’t get a standard policy, a guaranteed issue policy is likely better than not being covered at all, and you will not be denied.
A graded death benefit policy is also an option for those looking for coverage despite a history of severe depression. These policies pay only a percentage of the death benefit when you first get covered. For example, your beneficiaries may receive 25% of the death benefit if you pass away within the first year you have the policy; 50% if you pass away in year two; 75% in year three; and finally, the full death benefit only after four or more years of the policy being in effect.
It is important to note, however, that almost all life insurance policies contain a suicide clause. Suicide clauses either prohibit the payment of any death benefits in the event that a policyholder dies by suicide or allow the company to pay only a small percentage of the death benefit in the event of a death due to suicide.
Getting Life Insurance Is Possible Despite Depression
While it’s more difficult to get life insurance coverage after being diagnosed with any medical condition, including depression, there is no reason to believe you can’t get at least some protection for your loved ones.
You can opt for a guaranteed issue or graded death benefit policy if you have difficulty obtaining standard coverage, or you can shop around among insurers and provide proof your depression is well managed to find a standard policy that’s right for you.
Whatever type of coverage you decide to obtain, it is worth the effort to ensure that your family will be provided for if something happens to you. Start shopping today to get life insurance that covers you despite your depression so you can get a policy in place and have the peace of mind of knowing you’ve done right by the people you care about most.