Mental illness is a silent epidemic that affects tens of millions of people in the United States. Nearly 1 in 5 American adults have some form of mental illness, and for many of them, the daily challenges of life can be extra demanding. Getting life insurance with a mental illness is potentially difficult for people with chronic conditions. Even if you are approved for life insurance, you may have to pay more each month for coverage. Fortunately, you can still get affordable life insurance with a mental illness, though you may have to take a few extra steps to find a policy that works for you.
Why Does Mental Illness Affect Life Insurance?
To charge the right amount for their premiums, life insurance companies have to accurately assess their policyholders’ risk for every year they are customers. That means an insurance company usually looks into their customers’ age, weight, smoking habits, family medical history, occupation and even history of mental illness. This is because certain mental illnesses increase a person’s risk of death, which can be from a variety of causes that include suicide, accidents and disease.
After the insurance company gets the information it needs from an applicant, it will usually assign a risk category to the person based on the totality of risk factors. These categories are relatively standard across the life insurance industry, and they include:
- Super preferred
Applicants who fit into preferred and super-preferred categories often get the biggest life insurance policies at the lowest monthly rates. These policyholders are deemed to have the lowest risk of death for as long as the policy runs. Standard applicants may pay more for their coverage or only be eligible for reduced benefit amounts. It is not uncommon for people with a substandard rating to be denied coverage entirely.
While simply having a mental illness does not automatically disqualify you for getting life insurance, it can be one of the factors that pushes your rating down into a lower category. This can result in either higher premiums or an outright denial of coverage. While having a mental illness may hurt your ability to get coverage at a low rate, it is rare for this to be the only factor in the insurer’s decision not to offer you a policy.
How Can Insurance Companies Tell If You Have a Mental Illness?
When you apply for life insurance, you are usually asked to fill out a lengthy health questionnaire. This questionnaire usually includes questions about your mental health history, along with other questions about your health and lifestyle. It is important to be truthful when answering these questions because the insurance company can deny payment of a claim if false answers were given on the application.
Life insurance companies can also ask you to undergo a medical exam before confirming your coverage. This is usually a standard physical, though your insurer may ask for a focused examination or extra tests if there’s reason to believe you have a specific medical condition that affects your eligibility. This includes a mental health evaluation, which is similar to most regular exams and is typically performed by an M.D. psychiatrist or Ph.D psychologist.
You are also usually asked to supply the insurance company with a list of the medications you’ve been prescribed as part of the application process. Some drugs, such as Haldol or Zoloft, point to a mental health condition the insurance company might want to know about. If you take or have recently taken multiple prescription drugs commonly prescribed for mental illness, your insurance company might ask for a recent psychiatric evaluation to assess the risk of life insurance for you.
Can You Get Life Insurance With a Mental Illness?
Life insurance companies sell policies to people with mental illness all the time. Tens of millions of Americans who live with a mental illness carry life insurance, and depending on other risk factors, they sometimes pay the same premiums as other people in their general health category. The Americans With Disabilities Act requires that all businesses in the United States make what the law calls reasonable accommodations for people living with disabilities, which includes prevention of unreasonable discrimination against people with mental health considerations.
What Mental Illnesses Affect Your Ability to Get Life Insurance?
There are many kinds of mental health conditions you could have, and most of them range in severity between mild and disabling. Many conditions that affect mental health can also be hard to diagnose. It is not uncommon, for instance, for bipolar disorder to be initially mistaken for clinical depression or anxiety. Because of these uncertainties, insurance companies are generally less interested in the name of your condition than in their apparent severity and what steps, if any, you’re taking to manage them.
Instead of trying to diagnose everyone who applies for life insurance, companies generally look for signs of how your condition is affecting your quality of life. While there is a lot of room for interpretation of anybody’s medical history, insurers generally raise your perceived risk if you take multiple medications instead of one or if your medications are less commonly prescribed and more powerful than the usual treatments people get. Companies may also take into consideration the number of times, if any, that you have been hospitalized for a mental health crisis and how long ago the crisis was. There is a significant difference between, for example, a single suicide attempt 10 years ago and multiple recent attempts.
Insurance companies may also look into your related or co-occurring health conditions, as these might be more risky in the presence of a mental illness. People who report drinking alcohol, for example, are not necessarily riskier to insure than people who don’t. If you have a diagnosis of depression, however, frequent alcohol consumption is likely to be seen as a risk factor affecting your eligibility for life insurance.
Does Seeing a Psychiatrist Affect Life Insurance Premiums?
Seeing a professional therapist, such as a psychiatrist or other mental health worker, may affect your eligibility and premium level in a positive way. While it may be surprising to see a reduction in your premium when you start seeing a psychiatrist, the fact that you’re getting treatment can make your mental health condition seem less risky to the insurer. While having a mental illness does increase your risk for certain kinds of harm, your life insurance provider is likely to be more interested in whether you are controlling the condition with professional help.