When you buy any kind of insurance, insurers take on the risk of something unfortunate happening to you. In the case of life insurance, they’re taking on the risk of you dying during the time you hold the policy. How low or high risk they think you are will determine whether you’re eligible for cover and, if so, how much you should pay.
If you state that you have a mental health condition (or have had one in the past) when you apply for life insurance, insurers will definitely want to consider the potential implications of it during the ‘underwriting’ process. Most life insurance applications can be accepted automatically, after answering questions about your health and lifestyle, but depending on the info you provide about your mental health condition, your application could be handed over to a (human) underwriter for further review.
Depending on the condition you have, how severe it is, what treatment you’ve received, and how much it affects your daily life, you might find it more difficult or more expensive to get covered with life insurance. This is because mental health conditions can affect your motivation or ability to lead a healthy lifestyle – particularly when it comes to things like alcohol, drugs, food, and exercise – and because your condition could be accompanied by a propensity towards self-harm or suicide.
Can you buy life insurance if you’ve had or have a mental health condition?
You can always apply for life insurance, even if you’ve experienced mental ill health – though the success of your application will vary from insurer to insurer based on the nature of your condition. When you apply for life insurance, you always have to answer questions about your health and lifestyle, which includes questions around your:
- Personal health history
- Family health history
- Height and weight (BMI)
- Smoking status
Having a mental health condition could affect whether or not the insurer accepts your application, but you can always apply and, more often than not, buy cover. Getting help from an adviser can really help if you’ve ever experienced poor mental health, as they’ll quickly be able to filter out the insurers most likely to accept your application, who will offer the best terms for you and your circumstances.
What will insurers need to know about your mental health condition?
If you’ve ever been diagnosed with a mental health condition, it’s likely you’ll be required to provide the following during the underwriting process:
- What you’ve been diagnosed with
- When you were diagnosed
- What treatment you’ve had
- How frequent and severe your symptoms are
- Whether it’s caused you take time off work
- Whether it’s caused you to self-harm
- Whether you’ve had suicidal thoughts or attempted suicide
How will your mental health condition affect your life insurance application?
Typically, there are a few possible outcomes when you apply for life insurance but disclose a pre-existing mental health condition. These include:
- Your application being accepted as normal, with standard pricing rates (i.e. the same as they’d be for someone who hasn’t been diagnosed with a mental health condition)
- Your application being accepted but with a ‘loading’ on the price (i.e. your rates will be between 50% and 150% higher than they would be for someone who hasn’t been diagnosed with a mental health condition)
- Your application being accepted but with an exclusion in the policy conditions (i.e. relating to your specific diagnosis)
- Your application decision being postponed (this happens if the insurer thinks your mental health diagnosis poses too much of a risk right now, but has the potential to improve in the future)
- Your application being declined (this happens if the insurer thinks your mental health diagnosis means you’ll always be too high risk to insure)
In general, it’s safe to assume that:
- If your diagnosis was recent, or you’re currently waiting for an appointment with a psychiatrist or psychiatric nurse, your application is likely to be postponed
- If you’ve had a single episode of mild depression, a loading won’t usually be added to the price of life insurance unless you’re currently experiencing symptoms
- If you’ve had more than one episode of depression, a loading will be added to the price based on the severity and frequency of your symptoms, and when they were last felt
- If you’ve attempted suicide more than once, your life insurance application is likely to be declined
Why it’s important to disclose your mental health condition
When applying for life insurance, it’s extremely important to answer all the health questions honestly. If you don’t disclose that you’ve been diagnosed with a mental health condition, even if you haven’t experienced symptoms for a long time, you risk invalidating your policy and it not paying out in the future, when you need it to.