Traditional Fully Underwritten Policies

These policies require medical exams and an extensive health review. People with well-managed, stable schizophrenia may qualify, though often at higher rates (table ratings) or with exclusions. Those with recent hospitalizations, poor medication compliance, or unstable symptoms typically face denial.

Simplified Issue Policies

These require no medical exam, only health questions. They may be easier to obtain for those with stable conditions, but coverage amounts are typically limited, and premiums are higher than fully underwritten policies.

Guaranteed Issue Policies

These accept all applicants regardless of health but have very low coverage limits (typically $5,000-$25,000), high premiums, and often include a 2-3 year waiting period where only premiums are refunded if death occurs.

Medical Records Review

Underwriters will request Attending Physician Statements (APS) from your psychiatrist and other treating physicians. They review diagnosis dates, hospitalizations, medication history, treatment compliance, and response to treatment. Be aware that insurers have access to the Medical Information Bureau (MIB) and prescription databases.

Stability Assessment

Insurers look for evidence of stable symptoms over an extended period (typically several years). They evaluate frequency and severity of psychotic episodes, number of hospitalizations, emergency room visits, and changes in medication regimens. Recent instability is a significant concern for underwriters.

Functioning Level

Underwriters assess your ability to maintain employment, live independently, manage daily activities, and maintain relationships. Those who work full-time, live independently, and have strong support systems typically receive more favorable consideration than those who cannot maintain these activities.

Co-occurring Conditions

Underwriters consider other health factors, including substance use history (which can significantly impact approval), other mental health conditions, physical health issues, and overall mortality risk. Multiple risk factors compound the underwriting challenge.

Favorable Factors

• Long period of stability (typically 5+ years with no major episodes or hospitalizations)
• Consistent medication compliance with a stable medication regimen
• Regular psychiatric care with documented treatment adherence
• Full-time employment or consistent work history
• Independent living without assisted care requirements
• Strong support system (family, friends, healthcare team)
• No substance abuse history or long-term sobriety
• Good physical health with no other major conditions

Challenging Factors

• Recent diagnosis (within the last 2-5 years)
• Recent hospitalizations or emergency psychiatric care
• Medication non-compliance or frequent medication changes
• Ongoing psychotic symptoms despite treatment
• Suicide attempts or current suicidal ideation
• Substance abuse (past or present)
• Inability to work or receive disability benefits
• Multiple co-occurring conditions (physical or mental)
• Poor treatment compliance or gaps in psychiatric care

Term Life Insurance

Best For: Those with demonstrated long-term stability and good functioning.

Provides coverage for a specific term (10, 20, or 30 years). Most affordable option if you can qualify, but requires full medical underwriting. Expect table ratings (higher premiums) if approved. Some insurers may decline or postpone applications.

Simplified Issue Life Insurance

Best For: Those with stable conditions who want to avoid medical exams.

No medical exam required, only health questions. Faster approval but higher premiums and lower coverage limits (typically $50,000-$500,000). Questions about mental health will be asked—answer truthfully. May still result in denial depending on your specific situation and recent history.

Guaranteed Issue Life Insurance

Best For: Those who cannot qualify for other coverage.

Accepts all applicants regardless of health. No medical questions or exams. However, coverage is very limited ($5,000-$25,000), premiums are expensive relative to coverage, and there’s typically a 2-3 year waiting period where only premiums are refunded if you die (full benefit paid after waiting period).

Group Life Insurance

Best For: Those employed with employer-sponsored benefits.

Offered through employers, often with guaranteed issue up to certain amounts (typically 1-2x salary) without medical underwriting. It may be the easiest coverage to obtain. However, coverage is usually limited, ends if you leave the job, and may not be convertible to individual coverage without underwriting.

Final Expense / Burial Insurance

Best For: Those seeking small amounts to cover funeral costs.

Small permanent policies ($5,000-$25,000) specifically for funeral and burial expenses. Easier underwriting than traditional life insurance. May be guaranteed issue or have simplified underwriting. Higher cost per dollar of coverage but may be more accessible.

Step 1: Initial Application

You’ll complete an application with detailed questions about your medical history, including mental health diagnoses, treatments, hospitalizations, and medications. Be thorough and accurate—misrepresentations can result in claim denial during the contestability period (first 2 years).

Key Questions You’ll Face: Diagnosis date, treating physicians, hospitalizations, current medications, medication compliance, substance use history, employment status, and living situation.

Step 2: Medical Exam (If Required)

For fully underwritten policies, a paramedical exam will be scheduled. This typically includes height, weight, blood pressure, blood test, urine test, and basic health questions. The examiner will ask about medications and medical history. Be honest about your psychiatric medications—they will appear in your blood test and prescription records.

Step 3: Medical Records Review

The insurer will order Attending Physician Statements (APS) from your psychiatrist and other doctors. This process can take several weeks. Underwriters review diagnosis, treatment history, hospitalizations, medication compliance, symptom stability, and prognosis. Your cooperation in signing release forms speeds this process.

Step 4: Underwriting Decision

Underwriters evaluate all information and make a decision. Possible outcomes include: Approved at standard rates (unlikely with schizophrenia), Approved with table rating (higher premiums), Approved with exclusions (death from certain causes not covered), Postponed (decision delayed until greater stability demonstrated), or Declined (application denied).

Step 5: Decision Response

If approved with higher rates, you can accept the offer, decline, or negotiate through your agent. If postponed, ask what conditions must be met for reconsideration. If declined, you can apply with other insurers (each evaluates independently), appeal the decision with additional documentation, or explore guaranteed issue options.

1. Demonstrate Long-Term Stability

Wait until you have several years of documented stability before applying. Underwriters look favorably on extended periods without hospitalizations, consistent medication compliance, regular psychiatric care, and stable employment. If you’ve recently had an episode or hospitalization, waiting 2-5 years before applying may significantly improve your chances.

2. Maintain Consistent Treatment

Regular appointments with your psychiatrist and medication compliance are critical. Ensure your medical records document your stability, treatment adherence, and functioning level. Ask your psychiatrist to note in your records your ability to work, live independently, and manage daily activities—this helps underwriters assess your functioning level.

3. Work with Specialized Agents

Independent insurance agents who specialize in high-risk or impaired risk cases understand which insurers are more lenient with mental health conditions. They can shop your application to multiple companies and know which underwriters to approach. They may also help you time your application optimally and present your case in the most favorable light.

4. Be Completely Honest

Never misrepresent or omit information on your application. Insurers access medical databases, prescription records, and the Medical Information Bureau (MIB). Dishonesty can result in application denial, higher rates, or claim denial during the contestability period. If you’re unsure how to answer a question, work with your agent to answer accurately.

5. Provide Supporting Documentation

Consider providing a letter from your psychiatrist explaining your stability, treatment compliance, current functioning, and prognosis. Include documentation of employment, independent living, and any positive lifestyle factors. This additional context can help underwriters see beyond the diagnosis to your actual situation and functioning level.

6. Consider Starting with Group Coverage

If available through your employer, group life insurance often has guaranteed issue amounts that don’t require medical underwriting. This provides some coverage while you work toward stability for individual coverage. You may also be able to increase coverage during open enrollment periods with simplified underwriting.

7. Apply with Multiple Insurers

Different insurance companies have different underwriting guidelines and risk tolerance for mental health conditions. If one insurer declines or offers unfavorable terms, others may approve you or offer better rates. An experienced agent can help identify which companies to target based on their underwriting philosophies.

8. Optimize Your Physical Health

Since mental health conditions already increase your risk profile, maintaining excellent physical health helps. Control weight, blood pressure, and cholesterol. Avoid tobacco and excessive alcohol. Exercise regularly. These factors can partially offset concerns about your mental health diagnosis and demonstrate overall responsible health management.

Accidental Death Insurance

Pays a benefit only if death results from an accident (not illness). Much easier to obtain as it doesn’t typically require medical underwriting or ask about mental health. However, coverage is limited to accidental death only (car accidents, falls, etc.). Does not cover death from illness, suicide, or natural causes. Consider as supplemental coverage only.

Savings and Investment Strategy

Self-insurance through systematic saving and investing can provide financial protection for your family. While it requires discipline and time to build, it has no underwriting requirements and you maintain full control. Consider high-yield savings accounts, investment accounts, or other wealth-building strategies as alternatives or supplements to life insurance.

Living Benefits / Critical Illness Insurance

These policies pay out if you’re diagnosed with serious illnesses like cancer, heart attack, or stroke. Underwriting is typically easier than life insurance. While not a direct substitute for life insurance, they provide financial protection against serious health events. May be difficult to obtain but potentially more accessible than traditional life insurance.

Pre-need Funeral Insurance

Specialized insurance that covers specific funeral and burial expenses. Sold through funeral homes with minimal underwriting. Guarantees funeral costs are covered and protects your family from this financial burden. Typically easier to obtain than traditional life insurance but serves only this limited purpose.

❌ Misrepresenting Your Health

Never lie about or omit your diagnosis, hospitalizations, medications, or treatment history. Insurers have access to comprehensive medical databases and prescription records. Misrepresentation can result in claim denial during the contestability period, leaving your family without the financial protection you intended to provide.

❌ Applying Too Soon After Diagnosis or Episode

Applying immediately after diagnosis or a recent hospitalization significantly reduces approval chances. Most insurers want to see several years of stability. Patience often leads to better outcomes—waiting 2-5 years with demonstrated stability can mean the difference between denial and approval or between table ratings and standard rates.

❌ Not Working with a Specialized Agent

Captive agents (who represent only one company) may not know which insurers are more lenient with mental health conditions. Independent agents who specialize in impaired risk cases have relationships with multiple insurers and understand their different underwriting guidelines, significantly improving your chances of finding coverage.

❌ Giving Up After One Denial

Different insurers have different underwriting standards. One company’s denial doesn’t mean all will deny you. Apply with multiple companies (through an agent who can do this efficiently). Consider different policy types. A postponement or denial today doesn’t mean you can’t obtain coverage in the future after greater stability is demonstrated.

❌ Accepting the First Offer Without Shopping

If approved with table ratings (higher premiums), don’t immediately accept. Have your agent shop your application to other insurers who may offer better rates. Different companies price mental health risks differently. What one company rates as Table 4 (100% increase) might be Table 2 (50% increase) elsewhere.

❌ Not Maintaining Consistent Treatment

Gaps in psychiatric care, medication non-compliance, or inconsistent follow-up significantly hurt your application. Even if you feel stable, maintaining regular appointments and medication compliance shows insurers you’re managing your condition responsibly. This documentation is crucial during underwriting.