History of Mental Illness and Your Life Insurance Costs
If you've taken Xanax or Zoloft for anxiety, or if you once used Paxil or Prozac for depression, there’s a chance you won’t have to pay more for life insurance.
If your symptoms were mild and you responded well to treatment, you might even qualify for the best-priced life insurance premiums available.
Life insurers are concerned about a medical condition, only if it can affect your life expectancy. While serious mental illnesses might shorten your life span, a person who used a medication when feeling blue or who has sought treatment for depression after a tragedy isn't usually considered a significant risk for a life insurer.
"A lot of people have taken six weeks of Prozac, but it's not a pervasive part of their life and we understand that," says Dr. Nina Smith, medical director of the American United Life Insurance Company and a former president of the American Academy of Insurance Medicine. "It shouldn't keep someone from the really good rates."
Cases of anxiety attacks or bouts with depression brought on by tragedy — called reactive depressions — won't cost you more in life insurance premiums if you can show the insurer you have recovered. The key to getting the best-priced life insurance is making sure the insurer gets the records of your treatment.
You shouldn't worry your insurer will dig through your mental health records trying to find a reason not to issue you a life insurance policy. In fact, most insurers view hints of a problem as riskier than a well-documented mental illness. When insurers have the full medical records, they can see the positive outcome of your treatment.
"We're not going to leap to terrible conclusions based on a psychiatrist's records," says Smith. "We can usually act far more favorably when we have records than when we're guessing."
Even the more serious cases of clinical depression or recurrent problems brought on by bipolar disorders — more commonly known as manic depression — won't necessarily prevent you from getting the best life insurance prices. If you're being treated and taking medication that is successfully controlling your illness, you won't face many problems.
"Most people are well evaluated and well treated and can function relatively normally from day to day," says Dr. Steven Zimmerman, chief medical director for American General Life. "We can insure people who are well controlled at some of our best rates."
As with any disease, life insurers will want to know when you were diagnosed, who is treating you, what type of treatment you are undergoing, how long the treatments have gone on, how you are responding to the treatment, and how your treatment is followed up. You should wait for at least a few months after your initial diagnosis and treatment before applying for life insurance. Insurers will need to see how you are responding to your treatment before they can offer you the best-priced life insurance. The wait could be as little as three months if your condition is mild and you respond well to treatment.
"To a degree it is no different than someone with cancer or heart disease," says Zimmerman. "The disease is a starting point, then we look at people."
More serious mental health problems
There are some mental health red flags that make insurers very hesitant to offer you a life insurance policy. Someone with one or more suicide attempts in his past will draw much more scrutiny from life insurers, which will generally need to see clear and well-documented evidence of treatment and recovery before they will issue a policy.
Not all cases are the same, however. In cases where there is a risk of suicide, an applicant who can still go to work and function in society, even while taking strong doses of medication, will be viewed as less risky than someone who has to be hospitalized, says Smith.
Life insurers will generally wait one to two years after a suicide attempt before issuing a policy, and they will usually offer only fairly expensive policies for a few years thereafter. Furthermore, most life insurance policies include a "suicide clause" that exempts the insurer from paying the death benefit if the policyholder commits suicide within the first two years the policy is in force.
Other disorders
If you have a history of mental illness, as well as either drug or alcohol abuse, insurance companies will have concerns. Some people with mental illness attempt to medicate themselves through the use of drugs or alcohol. To insurers, this sort of behavior suggests the person is not in control of his illness.
Also, the combination of certain mental illnesses with other risk factors can be highly troubling to life insurers. For example, people suffering from severe anxiety, requiring tranquilizers to function, often have heart problems because of the high adrenaline levels caused by their disease. If this is combined with other evidence of coronary disease — such as high blood pressure or elevated cholesterol — insurance companies will probably either offer very expensive coverage, or none at all.
For those with mental illness, who have undergone successful treatment and have their condition under control, affordable life insurance might be readily available.
