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Life Insurance with Schizophrenia. Everything you need to know at a Glance!

life insurance application schizophrenia

In this article, we wanted to take a moment and try and answer some of the most common questions we get from folks either looking to purchase a life insurance policy on themselves after they have been diagnosed with Schizophrenia or looking to buy a life insurance policy on a family member who has been diagnosed with Schizophrenia.

Questions that will be directly addressed will include:

  • Can I qualify for life insurance after I’ve been diagnosed with Schizophrenia?
  • Why do life insurance companies care if I’ve been diagnosed with Schizophrenia?
  • What kind of information will the insurance companies ask me or be interested in?
  • How can I help ensure I get the “best life insurance”?

So, without further ado, let’s dive right in!

Can I qualify for life insurance after I’ve been diagnosed with Schizophrenia?

Unfortunately, Schizophrenia is one of those “types” of pre-existing medical conditions that will usually prevent someone from being able to qualify for a traditional term or whole life insurance policy. In fact, once it has been determined that you do have Schizophrenia or that you have been prescribed a medication used to treat Schizophrenia, most (if not all) of the best life insurance companies will pretty much AUTOMATICALLY decline one’s application.

Why do life insurance companies care if I’ve been diagnosed with Schizophrenia?

Even though Schizophrenia isn’t really considered a “life-threatening” disease, statistical data does seem to indicate that both men and women who suffer from this condition tend to experience a lower life expectancy.

Now why…

This is something that doctors and medical researchers can debate, but what is generally agreed upon is that folks who do suffer from Schizophrenia will also struggle with other “aspects” of life that most life insurance companies will look at when determining who they will and won’t insure.

Aspects such as:

  • Maintaining a healthy lifestyle,
  • Holding down a steady job or successfully running one’s own business,
  • Being able to care for one’s self,
  • Avoiding any potential legal issues (Hallucinations and/or “episodes” will often attract the attention of law enforcement),
  • Having and maintaining a good driving record (when applicable),
  • Avoiding any drug or alcohol abuse (Symptoms of Schizophrenia are often exacerbated by drug and alcohol use),
  • Etc…

This is why even though Schizophrenia may not be “life-threatening,” the symptoms and complications commonly associated with this disease are those that will often cause any individual to be denied traditional life insurance coverage, regardless of any pre-existing medical condition such as Schizophrenia.

What kind of information will the insurance companies ask me or be interested in?

Given the fact that most (if not all) life insurance companies are going to decline anyone who has been diagnosed with Schizophrenia automatically, you’re probably not going to be asked a whole bunch of questions about your condition, seeing how it’s not really going to matter.

The good news is, here at IBUSA, we spend an incredible amount of time creating relationships with dozens of different life insurance companies to minimize the number of times we have to apologize to a client for not having any options they will be able to qualify for. So, while other agencies may inform you that you just can’t qualify for a life insurance policy because of your Organic Brain Syndrome diagnosis, we prefer to ask you three simple questions that could determine whether or not you might just be able to qualify for a Guaranteed Issue Life insurance policy.

Those three questions are: 

  • #1. Are you a US Citizen?
  • #2. Are you between the ages of 50 (sometimes 45) and 85?
  • #3. What state do you live in?

What options might be available to me?

Now, at this point, it’s important not to get too excited because while it is true that some folks may be able to qualify for a Guaranteed Issue Life Insurance policy or maybe even an Accidental Death Policy, it’s important to understand that just because you “can” qualify may not mean that you’ll “want” to qualify.

The reason for this…

This is because while these “types” of products may meet the needs of some, they will have severe disadvantages that may be a “deal-breaker” for some. This is why, after reading what we’re about to discuss, we would invite you to give us then a call or visit one of our other articles that will go into greater detail about these “alternative products” so that you’ll know precisely what you are “getting” should you decide to purchase one of these “types” of products ultimately.

Accidental Death and Guaranteed Issue Life Insurance Policies Defined

Accidental Death Policies

Here at IBUSA, we tend to think that when appropriately explained, Accidental Death Policies tend to be a bit easier to understand than Guaranteed Issue Life Insurance Policies, so we want to begin by discussing exactly what an Accidental Death Policy is.  

The problem is…

Often, these “types” of products aren’t fully explained or, more commonly, aren’t presented in a way that specifically points out what these policies won’t provide coverage for. This is why we here at IBUSA want to begin our discussion of an Accidental Death Policy by explicitly stating that these “types” of policies are NOT TRUE LIFE INSURANCE POLICIES.  

Now, at this point you may be asking yourself…

“What do you mean by NATURAL CAUSE of death?”

When we use the term “natural cause of death,” we’re referring to an “illness-based” death as you would experience as a result of:

Or from some health-related complication that one might experience as a result of suffering from Schizophrenia.

These types of products…

You are only going to provide a death benefit to your family if you die from an accidental cause or any cause of death that isn’t “illness-based.”” Examples that would typically qualify as an Accidental Cause of death would typically include:

  • A motor vehicle accident,
  • A slip-and-fall accident
  • A natural disaster,
  • Victim of crime,
  • Etc…

This is nice, but usually, this isn’t what someone is looking for after they have been diagnosed with Organic Brain Disease. On the plus side, these “types” of products are generally pretty affordable. They will allow someone to purchase a large amount of ACCIDENT insurance for a relatively small amount of money. This brings us to our next possible option, which is a…

Guaranteed Issue Life Insurance

On the other hand, a Guaranteed Issue Life Insurance policy is A TRUE LIFE INSURANCE PRODUCT. This means that you do need to be a licensed life insurance agent to sell them, and “ultimately,” they will provide an individual true-life insurance coverage. Now we say “ultimately” because when you purchase a Guaranteed Issue Life Insurance Policy, you’re purchasing a life insurance policy that has a “catch” to it. 


In our experience here at IBUSA, we’ve found that the best way to discuss these types of life insurance policies is by analyzing the three significant disadvantages that these “types” of life insurance policies have aside from the fact that you generally have to be over the age of 50 and live in a state where these “types” of life insurance policies are available.

So, let’s dive right in…

Problem #1.

Guaranteed-issue life insurance policies only provide a limited amount of coverage, usually ” caping out ” around 25,000 dollars. 

This means that if you want to purchase more than $25,000 in coverage, a guaranteed issue life insurance policy might not suit you!  

(Yes, individuals can purchase several different guaranteed-issue life insurance policies from several different companies, but as we will now discuss, this can get expensive.)

Problem #2.

Dollar-for-dollar, guaranteed-issue life insurance policies aren’t always the most affordable compared to other “types” of insurance policies. Now, we don’t want to imply that these “types” of life insurance policies are going to cost a fortune; it’s just that if you can qualify for another “kind” of life insurance policy, that coverage will usually cost less dollar for dollar than a guaranteed issue life insurance policy will.

Problem #3.

Guaranteed-issue life insurance policies contain a clause commonly called a Graded Death Benefit.

Graded Death Benefit Defined:

Graded Death Benefits are “clauses” written into most (if not all) guaranteed issue life insurance policies, which state that a guaranteed issue life insurance policy won’t begin to cover an individual from “natural causes” of death until a certain waiting period has elapsed. This “waiting period” will usually last 2 to 3 years and is designed to make sure that someone who knows that they are very close to death from being able to purchase these “types” of life insurance policies.

And while…

This may seem incredibly unfair; it’s important to remember that a guaranteed life insurance policy doesn’t require you to take a medical exam or answer any health-related questions. So, a graded death benefit is the only thing that allows an insurance company to offer one of these “types” of life insurance policies.

The good news is…

While you may have to wait 2 to 3 years for a guaranteed-issued life Insurance policy to provide you true life insurance protection, these “types” of life insurance policies will provide immediate coverage for any “accidental causes” of death. They may also offer some “return of premium” to the beneficiary’s insured applicants who do end up dying from natural causes before their Graded Death Benefit expires. So, it’s like buying a small Accidental Death Policy that will ultimately “turn into” a true-life insurance policy after a period of time.

So, have we confused you yet?

If so, don’t fret. The purpose of this article wasn’t to try to make you an insurance expert; it was to give you an idea of what questions you’ll want to pursue before making any decisions. This brings us to the last topic we wanted to discuss here in this article, which is…

 How can I help ensure I get the “best life insurance”?

In our experience here at IBUSA, what we have found that works best for folks who have been diagnosed with a pre-existing medical condition where the “severity” of the condition is often “subjective” is for the applicant to make sure that they first find a true-life insurance professional who will work as an advocate for you. Such an agent who can help guide you through the application process and help you be perfectly “frank” about what options may or may not be possible.

From there…

You’ll also want to make sure that the very same agent you have chosen has access to dozens of different life insurance companies because, after all, it doesn’t matter how “great” of a life insurance agent you might have if they don’t have access to the “best” life insurance policy for you! 

Now, does it?

Lastly, before applying for coverage, you’ll want to be completely honest with your life insurance agent. By doing so, you will be helping them narrow down what options might be the “best.” So, what are you waiting for? Give us a call today and see what we can do for you!

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