How does mental health affect life insurance?

You can still get life insurance if you have a mental health disorder, including depression. However, you may pay higher premiums.

When you apply for life insurance, you'll have to provide your medical history. You'll likely undergo a medical exam and answer additional questions about your mental health history.

"The carriers will also run a prescription search to see what sort of medications an applicant is taking and they can sort of triangulate the severity of the condition via their medical questions that are completed during an in-person interview or a phone interview," says Jason Veirs, president and owner of Insurance Experts Solutions, Inc., a family-owned and operated independent broker. "In certain situations when an applicant has a mental illness, such as bipolar disorder or schizophrenia, it can prove to be rather challenging in getting coverage. It ultimately depends on the total history and what's in the medical records."

You could be considered a higher risk to insure if:

  • You’re on multiple medications
  • You’ve been hospitalized as a result of mental illness
  • You have other health conditions related to mental illness, such as a history of drug or alcohol misuse
  • You have a history of suicide attempts

It can be very challenging to get life insurance with a suicide attempt in your past. However, if your condition is under control with treatment or medication, you may still qualify for coverage and even get an affordable rate.

"Control is everything. If someone's condition is controlled and it's medically documented in their records by their physician, then they usually have a very good chance of obtaining life insurance at standard or sometimes even preferred rates," says Veirs.

Your medical history is crucial to an insurer's coverage decision. However, if you've experienced brief bouts of depression or isolated mental health episodes, you shouldn't be overly concerned about how this will affect your life insurance rates. "At the end of the day, the underwriters are humans just like you and me, and they can empathize with someone's situation depending on the particular circumstances," says Veirs.

Does seeing a psychiatrist affect life insurance?

The fact that you are seeing a psychiatrist alone doesn’t necessarily impact a life insurance application. However, if there is a mental health diagnosis associated with seeing that doctor, it may have an effect.

Life insurance companies look not only at the diagnosis, but at the treatment methods you are using for your mental illness. Seeing a psychiatrist indicates that you are in treatment and seeking to keep your mental illness controlled, which is a positive thing for the insurance company.

What happens if you’re denied life insurance due to depression?

If you can't qualify for a standard policy due to depression, you can consider a simplified issue or guaranteed issue life insurance policy.

  • Simplified issue life insurance doesn't involve a medical exam. However, you still have to answer a few questions about your medical history. 
  • Guaranteed issue life insurance doesn't involve a medical exam or medical questions. Because these policies are designed for those that are the riskiest to insure, guaranteed issue policies come with lower benefit amounts and higher premiums.

Veirs says accidental death and dismemberment insurance also might be a good option if you have a mental health disorder and have trouble getting a standard policy. This type of insurance doesn't require medical underwriting, which is usually a barrier for those with mental illness who are applying for coverage.

He also suggests looking into group life insurance through your employer. Group life insurance doesn’t usually require a medical exam or application questions.

Can life insurance companies access medical records?

Life insurers have access to your medical records, including mental health records, to gauge your risk.

Insurance underwriters consider several factors when deciding whether to issue a policy, including your medical history, which will reflect any diagnosed mental illnesses. Insurers will consider that when they assign a rating to determine how it affects your risk of premature death.

If you’re tempted to leave out your mental health diagnosis on your insurance application in pursuit of better rates, think again. It’s fraud to lie about your mental health when applying for coverage. If the insurance company finds out about this, they can cancel the policy. It’s better to be straightforward. 

Getting life insurance with a mental health disorder

It's typically better to apply for life insurance sooner rather than later. However, if you have a mental health disorder, waiting could be beneficial. If you are taking medication for your condition, this could give your body time to adjust and allow the medication to take effect.

Insurers also like to see that the condition has been under control for a while, which could mean less risk for them and more affordable premiums for you. Even if you are denied coverage, working with an experienced insurance professional could help you find a life insurance policy you can afford.