Life Insurance and Mental Health Issues.
Here at IBUSA, we’ll often receive phone calls from folks asking if someone with “mental health issues” can qualify for a traditional term or whole life insurance policy.
This may seem like an easy question to answer, but the problem is that without an “official diagnosis,” we wouldn’t, it’s difficult to know for sure. You see, being labeled with “mental health issues” is just that, a label.
It’s not as though…
This is an “official diagnosis” that a medical professional would use, which is why it’s not going to be all that pertinent to a life insurance company.
This is why…
In addition to asking if you have been diagnosed with any pre-existing medical conditions by a trained professional, most of the top-rated life insurance companies are also going to ask you a series of questions designed to “reveal” any “un-diagnosed” conditions and/or shed some light on how serious your known “issues” are.
For this reason…
We wanted to take a moment and briefly discuss what life insurance options may be available to someone that suffers from a mental health “issue.” As well as shed some light on what most life insurance companies will be looking for when making their decisions on who they will and won’t insure.
Questions that will be addressed in this article will be:
- Can people with mental health issues qualify for life insurance?
- What “types” of mental health issues are insurance companies most worried about?
- What “factors” will insurance companies look at when trying to determine the severity of one’s mental health issues?
- What options may be available to those who can’t qualify for traditional life insurance coverage?
So, without further ado, let’s dive right in!
Can people with mental health issues qualify for life insurance?
Yes, individuals who have been diagnosed with a mental health problem can and often will be able to qualify for a traditional term or whole life insurance policy. Some may even be eligible for a no medical exam life insurance policy as well!
The only problem is…
The term “mental health problem” can be used to describe a wide range of different medical conditions.
Some of which will undoubtedly prevent someone from being able to qualify for coverage, while some may have little or no effect whatsoever!
Many “mental health issues” can be treated, managed and in some cases even “cured” which is why, even though an individual has been diagnosed with a pre-existing mental health issue, we here at IBUSA always like to learn a little bit more about one’s situation before making any assumptions about their ability to qualify for traditional life insurance coverage.
That said, however…
There are some conditions that WILL cause an individual to be AUTOMATICALLY declined coverage.
What “types” of mental health issues are insurance companies most worried about?
What you’re generally going to find is that most life insurance companies are going to be most worried about applicants who suffer from:
- Extreme personality disorders,
- Current or active eating disorders,
- Trauma-related brain injury disorders,
And substance abuse triggered mental health disorders.
These types of mental health disorders…
Will be those that will likely trigger an automatic decline by most life insurance companies. Either because they’re considered “too risky” to insure, or they are “active” conditions which require treatment first before they will one day be considered “insurable” (think drug abuse and eating disorders).
These are not the only “types” of medical disorders an individual can suffer from or be diagnosed with. After all, according to the American Psychological Association, nearly 13% of all Americans over the age of 12 have taken some type of anti-depressant medication within the past month!
And technically, one could potentially say that these people suffer from mental health issues as well!
This is why…
With the vast majority of different pre-existing mental health issues that an individual could be diagnosed with, most life insurance companies aren’t going to rely on a doctor’s diagnosis alone.
Most life insurance companies are going to try and use a variety of different “indicators” or “factors” to help gain a better understanding of how severe one’s condition.
They won’t need to put too much emphasis on a particular diagnosis and instead try to learn more about how one’s diagnosis is affecting their qualify of life.
What “factors” will insurance companies look at when trying to determine the severity of one’s mental health issues?
As we just mentioned, most of the “best” life insurance companies in the industry, aren’t going to rely just on one’s diagnosis to determine whether or not an individual may be able to qualify for a traditional life insurance policy.
They’re simply going to use one’s diagnosis as just one of many “factors” that will come into play when determining one’s eligibility for coverage.
Other factors aside from one’s diagnosis can and often will include:
- How one is treating their condition?
- How “severe” would they classify their condition? Mild, moderate, or severe?
- What medications (if any) have they been prescribed?
- Over the past 12 months, have any of their medications changed at all?
- Have they ever been hospitalized due to their condition?
- Have they ever attempted suicide or contemplated suicide?
- Do they have any history of drug or alcohol abuse?
- Have they ever been convicted of a felony or misdemeanor?
- Do they have an active or current driver’s license?
- Are they currently working now?
- In the past 12 months, have they applied for or received any form of disability benefits?
By asking a lot of these “types” of questions, an insurance company can gain some insight into how their condition may be preventing them from being able to live a “normal” life.
For example, if you have been diagnosed with depression or bipolar disorder, yet you seem to have your condition well under control by all indications including:
- Steady employment,
- Consistent medication history,
- No issues with substance abuse or criminal offenses,
- A clean driving record,
Who’s to say that you shouldn’t be able to qualify for a traditional life insurance policy.
It’s not as though your condition has become unmanageable! This is why in cases like these, qualifying for coverage may not be an issue provided you apply with the “right” life insurance company for you.
Compare this situation with someone that has been diagnosed with depression or bipolar disorder that:
- Isn’t currently working or has qualified for disability benefits,
- Doesn’t have a valid driver’s license or has a suspended license,
Or may have a more “chaotic” treatment history, including multiple different medications and possibly a few hospital stays!
In cases like these…
It’s pretty safe to say that this person probably won’t be able to qualify for a traditional life insurance policy even though he or she has the same “diagnosis” as our first example.
Which is why…
At IBUSA we never like to assume anything when it comes to determining who will and won’t qualify for coverage. This brings us to the last topic that we wanted to take a moment and discuss which is…
What options may be available to those who can’t qualify for traditional life insurance coverage?
There really are only two options for those who aren’t able to qualify for a traditional life insurance policy. The first option will be to purchase a Guaranteed Issue Life Insurance Policy, which will only provide up to about $25,000 in coverage and contain a Graded Death benefit (for more information about graded death benefits, please see our article Top 10 Best Final Expense Companies).
The second option…
Would be to purchase an Accidental Death Policy which can provide up to $500,000 dollars in coverage but won’t actually protect you or your loved one’s in the event that you die from a NATURAL CAUSE of death such as a:
- Heart attack,
Accidental death policies only provide coverage for deaths caused by ACCIDENTS. Accidents such as those cause by:
- Motor vehicles,
- Slip and falls,
- Natural disasters,
This is why, even though both of these “alternative products” can be beneficial to some, they are rarely someone’s first choice when looking to purchase a life insurance policy.
For this reason…
We here at IBUSA will only turn to these options if they truly meet your needs or if given your current mental health “issue” one of these types of products is all that you can qualify for.
The good news is that because we offer a wide variety of different life insurance products, we’ll never try and sell you on any one type.
We’ll simply provide you with all of your options, answer any and all questions you may have and then let you decide which type of policy you feel will be best for you and your family.
So, if your ready to get started, just give us a call and let us see what we can do for you!