Buying Insurance With A History of Depression
Having a current or past diagnosis of depression does not necessarily mean you will be declined when applying for life insurance or disability insurance. Depression is one of the most common mental health disorders. Two critical pieces of information will give you a better chance of getting an offer to purchase coverage. The first key is to work with an insurance company that has a good track record of offering coverage to customers with a history of depression. The reason this is important is not all life insurance, or disability insurance companies have an in-depth knowledge of mental health illness and how to work with customers that have a history of this health issue. If an insurance company has not established a business model that will allow them to successfully offer coverage and pay claims for people with a history of mental health issues, they avoid insuring people with those health problems. An experienced independent agent should be able to help you find the right company.
Finding The Right Match
Before you fill out any forms or grant access to your health records, ask your agent about the insurance company’s history of working with customers that have had a diagnosis of depression. If you can eliminate a company before you apply for coverage, this will help you when you do find an insurance company that matches your needs. If you apply for insurance and get declined, the failed application process will hurt your chances of getting life insurance or disability insurance coverage from any company. Almost every life and disability insurance company will ask if you have ever been declined or rated by an insurance company. If you have to answer yes, any other insurance company you apply to will want specific information on why you were declined.
Answering The Questions
The second key is to complete the insurance company application by answering only the questions that are asked as truthfully as possible. If you have ever discussed your mood with any medical doctor or psychologist, and you have paid for it with your health insurance benefit, answer all health questions to the degree that you are asked. For example, if you saw a marriage counselor and were not diagnosed with any mood disorder and there was never a claim made on your health insurance, that is not a reportable issue. If you are not sure if there was a mental health diagnosis, go back to the marriage counselor and ask. Another example of how to precisely answer health questions on an insurance company application is if the form request information from the past ten years, stick to that time period.
Filing Claims
If you have filed a claim with your health insurance provider for mental health, the diagnosis on that claim is vital to consider. As part of almost any health-related insurance application process, you probably agreed to share your medical information with a company called the Medical Information Bureau, commonly known as the MIB. So if you made a claim for a mental health provider that went through your health insurance company, most if not all of the other life and disability insurers would have access to a record of your claims.
You must walk a fine line when you fill out an insurance company application. If you answer no to anything and the real answer should have been yes, some insurance companies may decline you if they feel you are hiding something. Keep in mind that the person considering your application, commonly called the underwriter will sometimes go on their instincts. For example, let’s say your primary care doctor, unbeknownst to you, wrote down that you have depression. You did not report this.
Additionally, you have a speeding ticket that you forgot to report. You may not get a chance to correct the answer.
If an insurance company underwriter gets too many contradictions, they may decline to offer you a policy because they feel there may be too many inaccuracies in your application. If you follow these guidelines, you will have a better chance of being offered a life insurance or disability insurance policy at a reasonable price. An experienced insurance agent can help you avoid this potential problem.
Case Examples
Here are two case examples of people that have been diagnosed with depression and are applying for life insurance and disability insurance. Let us call them Michael and Mandy. Michael is a 50-year-old man that owns an oilfield service company. He is applying for disability insurance and life insurance. With the disability insurance, Michael has requested a policy that will begin paying a benefit after 90 days of disability. Six years ago, he went through a divorce and was diagnosed with depression by his primary care physician. There were no other complications. His doctor prescribed the antidepressant Lexapro. He took the Lexapro for one year, and at his annual physical checkup, his physician told him he could stop taking Lexapro if he did not feel he needed it. It has been five years since he stopped taking the antidepressant and Michael has had no reoccurring depression.
50-year-old Business Owner
In Michael’s case, he went through a relatively short period of depression that had a clearly identifiable cause. The medication helped him through a difficult time; he recovered, discontinued the medication and was diagnosed by his physician as recovered. Michael would probably be offered a disability policy with a standard rating. The rating system that disability insurance companies use is similar from one company to another. For disability policies, the top rating which has the lowest cost is usually a preferred rating.
The application process for life insurance is a little different than for disability insurance. One of the reasons that process is different is because of the difference between how claims are made. With a disability insurance policy, there are many ways to be diagnosed with the condition that will qualify you for the payment of a benefit. With life insurance, there are only two ways to collect a benefit. Some life insurance companies will allow customers to collect part of their benefit if they are diagnosed with a terminal illness and a short time to live. The only other way for the life insurance company to pay a benefit is if the insured customer dies.
You will see that the terminology is a little different from a life insurance company versus a disability insurance company. Most disability policies only give a standard rating and a preferred. There are some other rating methods disability insurance companies use, however that goes beyond the scope of this post. Paradoxically, life insurance companies have a standard, preferred, preferred plus and some companies use elite preferred or super preferred. In the circumstance for Michael, the 50-year-old business owner, he would probably be offered the preferred rating for life insurance the highest rating of preferred plus or elite preferred is for customers who have no health issues. A preferred rating will still give Michael a life insurance policy at a very reasonable cost.
37-year-old Physician
Let us now look at the life and disability insurance that might be available for Mandy. Mandy is a 37-year-old physician who has been in emergency medicine for five years. She is applying for a disability insurance policy that will begin paying a benefit after 90 days of disability. In Mandy’s last year of residency at the age of 30, she began to have significant difficulty sleeping; she began to lose weight due to a loss of appetite, she started having problems concentrating and had a depressed mood. She recognized that she had some issues and sought the help of a psychiatrist. Mandy’s psychiatrist diagnosed her with major depression and placed her on Amitriptyline. She began the medication with 50mg at bedtime which helped her sleep. She increased her dosage up to 100mg per day and stayed at that level for the next year. Her psychiatrist also recommended cognitive behavioral therapy with a psychologist. Mandy responded very well to the medication and the therapy. After a year of medication and therapy her psychiatrist suggested that she could discontinue the therapy and reduce the Amitriptyline dosage to 50mg per day. Mandy has continued to see a psychiatrist every six months for the past six years and has maintained the 50mg of Amitriptyline. Mandy recovered from major depression and did not have any other episodes of depression. She is currently diagnosed with mild depression.
In Mandy’s circumstance, there are a few significant details that the disability and life insurance underwriter will review. The first detail is that Mandy did not have any reoccurring episodes of depression. More incidents would have led the insurance company underwriters to expect more relapse and possibly decline or delay coverage. Since Mandy has been stable and has taken only one antidepressant, the disability insurance underwriter would more than likely offer Mandy a disability policy with a mental and nervous rider. That means that the disability policy will pay a benefit for any other circumstance except mental and nervous disorders. A disability insurance policy with a mental and nervous disorder rider still gives Mandy significant protection. According to WebMD, the other significant reasons for disability are arthritis, back pain, heart disease, cancer and diabetes (Griffin & Nazario, 2013).
Mandy would probably be offered a life insurance policy with a standard rating. After one year, she may be eligible for a preferred rating. Her situation will be reevaluated by a life insurance underwriter if she requests a reevaluation. The good thing about reassessments is you can only go up. If you have an additional health issue, your life insurance health rating cannot go up with the same company. The same applies to the disability insurance policies; the rating quality can only go up, they cannot go down.
Every application for individual life insurance or disability insurance is considered on its merit. These case examples are not guarantees of acceptance. If you have a current or past diagnosis of depression, I would be glad to discuss helping you find life insurance or disability insurance.
If you are on a PC, there should be a blue "Ask Van" button at the top of the page to contact me. You can also call or text me a 713-320-6124.
Reference
Griffin, R. M., & Nazario, MD, B. (2013, March 4). Leading causes of disability. Retrieved June 29, 2018, from https://www.webmd.com/healthy-aging/features/top-causes-disability#1
留言