How to Buy Life Insurance for People with Depression

Written by Jeff Root

Although depression, and mental illness in general, is more widely accepted today – there still remains a stigma around the issue.  In addition to the misunderstandings, and lack of widely accepted principals to deal with the illness, there is the general aversion to any issue surrounding mental health. For that reason, many people who would otherwise apply for life insurance, don’t, because somewhere in their past, or present, they have dealt with a mental illness.

Both physical and mental health is assessed when applying for life insurance.  It is important to be honest with the agent when it comes to mental illness. It should be noted that many insurance companies say that rates could be affected by mental illness, not that it will be affected.

In many instances, a bout of depression after a life event (such as a death in the family) can be generally overlooked as a high risk applicant, because you are not likely to die from that. The risk can be thought to be high for severe or chronic depression, bipolar disorder, where the insured may be at a greater risk for suicide.

Many insurance companies will offer affordable rates for someone with a mental illness, even with a documented or on-going issue. Anxiety, which is a prevalent illness today, can find a healthy female, taking medication daily a term life policy for a small monthly premium.

How are Insurance Rates Affected by Mental Illness, Especially Depression?

By and large, life insurance companies are going to delve into an applicant’s background and look at any and all history when it comes to mental health. Classifications vary but do not always increase in a negative way.

If a person is diagnosed with depression but not doing anything to alleviate the issue, then rates will be high, or they could be denied. If the same person is taking a proactive role in the treatment, with medication and therapy, then rates will be lower, or not affected at all, by the illness.

When determining the classification for rating a person with a history of depression, insurance companies will ask the following questions on applications:

  • Have you ever been prescribed medication for depression?
  • What was the date of the first diagnosis?
  • What level of depression do you have (mild, moderate or severe)?
  • Is your depression chronic, or temporary?
  • What treatment are you seeking at this time
  • Are you taking multiple medications?
  • Have you ever been hospitalized for any mental illness including depression?
  • Have you ever attempted suicide?
  • Have you ever been hospitalized for a suicide-related event?

How you answer these questions will determine your classification, and then a rate will be decided on by the company. Rates are found by utilizing actuary tables and aggregate data, which show the probability rate of a particular person dying at a particular age.  Many factors go into the determination of a rate and agents have no control over the rate that is offered.

Depression is classified as a pre-existing condition, and as such, it affects rates. The mortality rate is higher for mental health in general and that is going to affect the bottom line of the insurance company, and that lower return rate means higher premiums.

In general people with depression die at younger ages and more often, than people who do not have depression. While this might seem unfair, it is a fact, and that makes it important to life insurance companies.

What Types of Mental Illness Do Insurance Companies Watch Out For?

While many forms of depression are viewed as acceptable to life insurance companies, depression from Post-Traumatic Stress Disorder will be a red flag as many times suicidal ideations accompany this disorder.

Any type of suicide-related incidents will be declined, especially if it is not the first time. A suicide attempt a long time in the past, accompanied by an active interest in treatment may get a rate, but it may be on the high side.

Unfortunately, many veterans are classified as automatically having some form of depression and rated higher, or declined, due to the high occurrence of mental illness in military personnel.

A reputable insurance company will take the time to thoroughly investigate the entire history of a person’s depression. There are options for people in these situations, like a No Medical Exam policy, which can be expensive and will have a lower death benefit. The truth is, many people with depression do have the option to get life insurance.

How to Get Life Insurance with Depression

In order to get life insurance with depression, first, you have a classification. Some of the most common forms of depression and rate classes are listed below. Being honest with the agent will result in an accurate rate for your situation.

What happens when you lie on a life insurance application?

Lying can result in a cancellation of the insurance policy and record of dishonesty. In fact, it is insurance fraud to lie about a health issue.

If you are healthy and have had a mild depression, or situational depression, where you don’t need medication and the episode passes over a short period of time, the rate would usually be the highest offered, something like Preferred Best or Platinum. This is the least expensive rate and would be close to the best rates for anyone, whether or not they have depression.

For the depression that is well-controlled or is a clinical type of depression, there would be medication for more than a year and no previous hospital stays.

This would land an applicant squarely in Preferred and any kind of ongoing moderate depressive episodes would be classed as Standard. That is dependent on the advent of suicide attempts. There must be no suicide attempts or record of suicidal ideations for at least 5 years.

What Types of Depression are There and How are They Rated by Life Insurance Companies?

Although this is not an exhaustive list of all types and forms of depression it does cover the major forms and types that most life insurance companies recognize and classify:

Situational Depression

This form of depression is usually brought on by traumatic life events, such as a death in a family, or a divorce. The feelings of helplessness or the general feeling of despair passes with time. Generally not going to cause a rate increase for life insurance.

Clinical Depression

The most frequently diagnosed type of depression in the United States, this form of depression causes feelings of despair and hopelessness that can last up to 14 days. It is common for this form of depression to reoccur several times over time and can disrupt a person’s, ability to function.  Simple tasks like eating and sleeping are disrupted, and work performance can suffer. Rates for this form of depression can be higher than other forms of the illness.

Dysthymia

This form of persistent depression is characterized by a constant low mood or depressive episode that last a very long time. Usually, the sufferer can function, but not at their best. Not normally thought of as harboring feelings of suicide, this form of depression can cause somewhat higher rates in life insurance policies.

SAD or Seasonal Affective Disorder

Lack of sunlight during the winter months can cause some people to feel forlorn and desperate. This form of depression passes with the warmer weather when the days are longer and sunlight is more prevalent. There is very little change in life insurance rates for this type of diagnosis.

PTSD or Post Traumatic Stress Disorder

A severe form of depression and anxiety arising from a traumatic event, or events. This form of depression and anxiety is best defined by a veteran of war, especially combat veterans. It so insidious it can ruin a person’s entire life, or just be one issue that is constantly plaguing a person. Many insurance companies will automatically increase their rates for military personnel who were in combat situations.

Bipolar Disorder – (was called Manic Depression)

A condition where a person experiences heightened feelings like euphoria (Manic) and very low feelings (Depression). This disorder is becoming very well known and attributed to many different types of dysfunctions, that hadn’t been recognized as part of this condition before. Medication can help the sufferer.

There are many combinations of symptoms associated with this disorder. The life insurance rate for this type of depression will be very high if the person is proactive and been in treatment for some time.

As with any life insurance policy, a great deal depends on the applicants’ overall health, both physical and mental.

How Much Does Life Insurance with Depression Cost?

Here are some sample rates for depression sufferers from top companies. Here are some sample rates 40-year-old male and female in the preferred health class seeking $500,000 of coverage:

Term Male Female
10 Year $24/mo. $21/mo.
20 Year $38/mo. $32/mo.
30 Year $61/mo. $50/mo.
Whole Life $287/mo. $236/mo.

Here are some sample rates 40-year-old male and female in the regular health class seeking $500,000 of coverage:

Term Male Female
10 Year $36/mo. $32/mo.
20 Year $59/mo. $47/mo.
30 Year $105/mo. $79/mo.
Whole Life $345/mo. $292/mo.

As risk rating decreases, rates become increasingly harder to predict.  Depending on your health history, medications, and overall mental and physical health, and age, your rates can vary quite a bit.

Usually, in order to get life insurance that is not no medical exam life insurance, people with depression will be asked more questions by insurance agents in order to determine the best life insurance rates for them.

What are the Best Life Insurance Companies for People with Depression?

In recent years, with the increase in research studies, depression and its ancillary disorders are more accepted in the medical fields and far more treatable than ever before. Some of the top life insurance companies are now offering affordable rates to depression sufferers.

1. Lincoln Financial

This life insurance company is now a go-to insurer for people with mental health issues. They are underwriting policies with affordable rates for depression, PTSD, anxiety, and even well-controlled bipolar disorder. Offering some of the best rates for people 40 and over.

2. Prudential

A brand name in the industry, Prudential is offering rates that are very competitive for people with depression. As one of the favored insurers in the entire industry, their underwriting is recognized as some the best out there, offering fair rates for depression, in the mild classification, but more of a standard or substandard for the moderate and severe types of depression.

3. John Hancock

Truly an original, this well-known insurer, one of the all-time contenders for life insurance policies. Best known for their great underwriting practices, reliability, and service, they are opening up to mild depression with preferred rates, and standard rates for moderate depression.
This giant of the term life insurance policy is not as likely to give preferred rates but will offer rates for the more severe disorders and will go the extra mile to get those types of issues covered.

4. Transamerica

This giant of the term life insurance policy is not as likely to give preferred rates but will offer rates for the more severe disorders and will go the extra mile to get those types of issues covered.

Company A.M.Best Customer Reviews
1. Lincoln Financial A+ 4.1 / 5
2. Prudential A+ 4.2 / 5
3. John Hancock A++ 4.1 / 5
4. Transamerica A 4.0 / 5

The table above briefly outlines our top picks for life insurance companies for people with depression.  Our ratings are based on 3 key identifiers that we base a life insurance companies overall success around:

  • Financial Stability
  • Life Insurance Company Reviews
  • Claims Paid Out

Put simply, when choosing the best life insurance company for you, you want to make sure that the choice you make reflects some of these identifiers.

You want a company that has a rich history of paying out claims, financial stability over years of history, and good life insurance customer reviews.

While each company will have their share of complaints, you want to find one that has exceptional good reviews as well to outweigh the bad ones.

Before we take a deeper look into the life insurance policies these companies offer, how to get the best life insurance rates for people with depression, and what steps to take next, let’s take some time to answer some frequently asked questions about life insurance for people with depression!

Finding the Best Life Insurance for People with Depression

When applying for life insurance, it is important to always work with a life insurance agent. Specifically, working with an independent life insurance agent is your best bet. Because independent life insurance agents are not bound to working with anyone insurer, they can provide quotes to applicants from a multitude of life insurance companies.

They can also help you compare the best life insurance rates for people with depression.  On top of that, they also have in-depth knowledge of the best insurance providers for your specific financial and health situation.

Best of all, speaking with an independent life insurance agent is free!  Speak with one today to begin comparing the best life insurance rates today!  Get the coverage you and your family deserve, and rest easy knowing it is the best policy to protect your family.

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About Best Life Insurance Companies
About Best Life Insurance Companies

We work with individuals across the nation to secure the best life insurance rates.

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