Best life insurance for those with a mental health history

Receiving a mental health diagnosis, like any other medical condition, can make many people concerned about their chances of finding a life insurance company willing to extend them coverage. While your medical history may be used to determine your eligibility and premium, having a mental health condition does not automatically disqualify you from coverage.

In fact, similar to homeowners and auto insurance, many factors are used to determine your eligibility. If you have a history of mental illness and are looking for life insurance, it may take a little more time and documentation, but you may still be approved at an affordable rate. As with other health conditions, how you manage your condition and its severity is critical to obtaining a life insurance policy.

What qualifies as a mental health condition?

A mental health condition is one that "affects a person's thinking, feeling, behavior, or mood," according to the National Alliance on Mental Illness. Mental illness patients frequently feel isolated, despite the fact that 50% of lifetime mental health conditions manifest by the age of 14 and 75% by the age of 24. Any of the following mental health conditions, if diagnosed and treated, may have an impact on life insurance:

  • Anxiety disorders
  • Attention Deficit Hyperactivity Disorder (ADHD)
  • Bipolar Disorder
  • Borderline Personality Disorder (BPD)
  • Dissociative Disorders
  • Eating disorders
  • Obsessive-Compulsive Disorder (OCD)
  • Post-traumatic Stress Disorder (PTSD)
  • Psychosis
  • Schizoaffective Disorder
  • Schizophrenia

How mental health impacts life insurance

When shopping for life insurance, your mental and physical health are usually assessed. This is accomplished initially by responding to specific questions on the application. While the format of the questions varies by company, you can generally expect questions like:

  • When were you diagnosed with your mental illness?
  • What severity is your mental health diagnosis (mild to severe)?
  • Have you been hospitalized in the last 12 months for a mental health condition?
  • How frequently do you have episodes, and when was the last one?
  • Do your symptoms affect your ability to perform daily living tasks?
  • Do you currently have a treatment plan and are you following it?

Certain mental health conditions, such as severe anxiety or depression, schizophrenia, and OCD, which have a higher risk of suicide, may result in higher premiums than other mental illnesses.

Seeing a mental health professional may improve your chances of being approved for life insurance at a lower rate, especially if you are adhering to the treatment plan, have not recently been hospitalized, and have a consistent employment history.

How mental health history impact coverage

Although each application is evaluated individually, keep the following points in mind to understand the impact mental health history may have on coverage eligibility:

WHEN COVERAGE MIGHT BE MORE EXPENSIVE

WHEN COVERAGE MIGHT BE DENIED

New or several past mental health-related hospitalizations

History of attempted suicide

Diagnosed with a mental health condition that has higher rates of suicide, such as anxiety or depression

You fail to disclose mental health treatments

Unable to work due to mental health conditions, such as depression

If you were hospitalized within the last year for mental health conditions

 

Fortunately, life insurance can be purchased after a mental health diagnosis. It is possible to improve your coverage classification by adhering to prescribed treatment plans and remaining under the care of a psychiatrist and physician. Maintaining a good employment history is another way to increase your chances of getting a policy or lower premiums.

Guaranteed issue life insurance

If you are denied coverage due to a mental health diagnosis, you do have another option. Guaranteed issue life insurance is a type of whole life insurance that does not require health questions or a medical exam in most cases.

You will be required to answer a few basic personal questions, which are similar to those found on standard life insurance applications. You will most likely receive instant approval and will be able to keep the policy as long as you pay the premiums.

Guaranteed issue life insurance is not available from all companies, and most cap coverage at $25,000 or $50,000. Because guaranteed issue life insurance is whole life insurance, it is frequently more expensive. Rates for this type of coverage can be the most expensive because there is no health assessment, and they are based on a high-risk basis.

What happens if I lie about my mental health diagnosis?

You should never lie on your application, including your mental health diagnosis. Underwriters of life insurance use databases such as the Medical Information Bureau (MIB) to confirm the medical history information you provided. If it is discovered that you lied on the application, it is considered insurance fraud and may result in serious consequences. Lying is also reported to the MIB, which other insurance companies can access if you apply for coverage in the future.

The majority of life insurance policies, including term life insurance, have a two-year suicide clause. This provision exists to prevent people from purchasing life insurance with the intent of committing suicide and having their family's income protected. Companies may also include a contestability clause in the policy for the first two or three years.

This clause gives the company the authority to investigate any death claim for misrepresentation. If it is discovered that you lied on the application, your beneficiary may not receive your death benefit. They may receive the premiums paid into the policy up until your death, but they will not receive the death benefit you paid for.