Buying Life Insurance When You Have Bipolar Disorder

If you are under the care of a mental health professional for bipolar disorder and you have determined that you need life insurance, there are specific steps that you can take that will give you a better chance of getting life insurance at a reasonable cost. It is critical that you be forthright about your mental and physical health history. If you have consulted with a medical or mental health professional and you paid for those services through your health insurance, there is a very high likelihood that information about your diagnosis is available to any life insurance company to whom you apply. Almost all insurance companies use the services of the Medical Information Bureau or MIB. When you complete a health-related insurance application, you may recall signing the legal disclosures. Part of those disclosures is your agreement that the company you are applying to can release the health information that you provided to the MIB. It is similar to the legal disclosure of many online services that you use. If you do not agree to the terms of their agreement, you will not get their service.

Three Steps for Obtaining Coverage

Before looking deeper into case examples, let's look closer at three steps to find the right life insurance company for your situation. First, we will look at a simple selection process, then I will describe how to use a tactical method of applying for coverage, and last I’ll give a basic understanding of bipolar disorder that is used to evaluate customers for life insurance coverage.

Selecting the Right Insurer

Understanding how a life insurance company views offering coverage for people with mental health issues will help in finding a company that will provide you a policy at a reasonable price. Here is the first thing to consider when choosing a life insurance company for this situation. Does the insurer have a record of offering life insurance to customers with a bipolar disorder? Not all life insurance companies look at mental health in the same way. Some life insurance companies have a business model that takes an insufficient view of mental health disorders. Those companies refer to any mental health disorder as a mood disorder. If an insurer refers to all mental health disorders, in the same way, that company may not have the understanding or willingness to offer coverage to someone with bipolar disorder. This is the reason why. The American Psychiatric Association list over 300 mental health disorders in the Diagnostic and Statistical Manual of Mental Disorders more commonly known as the DSM-5 (APA, 2016). The DSM-5 is the manual that every mental health professional uses to diagnosis patients. I am not suggesting that a life insurance company needs to offer written guidance on every disorder. However, if a life insurance company lumps all of these together and calls every mental health issue a mood disorder, you probably need to get a quote from a different company. An experienced independent life insurance agent that deals with several life insurance companies should be able to give you guidance on which companies would be the best to apply.

Using a Trial Application

How you apply for life insurance can be as important as to which company you choose. Many times, life insurance customers who have a bipolar disorder may have other health issues such as heart disease, diabetes, COPD or other health issues. For customers that have multiple health issues, it may be better for a life insurance agent to ask you to submit your request for life insurance through a trial application process. The trial application process is different than requesting a life insurance policy from only one life insurance company.

The trial application process entails taking your specific health information and submitting it to a panel of life insurance companies. Life insurance agents that use this process submit the trial application to a third party broker. The third party broker convenes a conference call once per week with many different life insurance underwriting departments. They review a general list of potential customers along with general information about a potential customer’s health. What makes this process very valuable to a potential customer that has bipolar disorder is that their request for life insurance can be made anonymously to several life insurance companies at the same time. This way, only the life insurance companies that have an interest in offering life insurance to a person with a bipolar disorder will make a verbal indication of interest in the customer.

This process can avoid a specific life insurance company declining a person with bipolar disorder. The reason this is so important is that a decision of a company to decline to offer a life insurance policy goes into the MIB as well. If a person with a bipolar disorder gets rejected once, there is a high probability that other companies will decline to offer life insurance because of another company’s decline.

Basics of Bipolar Disorder

Before looking deeper into possible case examples, it is helpful to have a basic understanding of bipolar disorder. Psychology Today describes bipolar disorder as a “manic-depressive illness, (which) is characterized by severe mood shifts or a mix of depression and high-energy phases known as manic episodes” (Psychology Today, 2018). The individual at the life insurance company who reviews life insurance applications is called the underwriter. For applicants that have bipolar disorder, the underwriter will consider when the applicant first was diagnosed with bipolar disorder, at which level the illness is present, what medications have been prescribed, is the applicant receiving therapy, and what has been the history of managing the illness. Underwriters that frequently offer applicants with bipolar disorder a life insurance policy have a good workable understanding of the levels of the illness and its potential progression.

30-year-old Working Mother

With this basic understanding of bipolar disorder, let's look at two case examples. The first example is for Mary. She is a 30-year-old accountant. Mary is married and has one son that was born six years ago when Mary was 24. After Mary’s son was born, she went through postpartum depression and her gynecologist prescribed an antidepressant for Mary. For the first few months, Mary felt great, needed less sleep and had more energy. After about eight months, Mary began to feel depressed again. Mary’s gynecologist referred her to a psychiatrist who diagnosed Mary with Bipolar Disorder type II. Mary had been taking Lithium, so her psychiatrist prescribed Zoloft to be added. After a few months of altering the medication’s dosage, Mary’s mood evened out. She no longer had highs and lows. In the months that Mary was determining what medication dosage worked for her, she also began to work with a therapist. After six years Mary manages her medication well. She no longer sees the therapist. However, she does see her psychiatrist every six months.

An underwriter would look at the length of time that Mary has been stable with no episodes or medication changes. Underwriters also take into consideration how many medications a person needs to control their bipolar disorder. Underwriters look at the number of medications as an indicator of the complexity or severity of the illness. If there are no other remarkable health considerations, the underwriter would probably give Mary a life insurance policy with a table one or two rating.

Health ratings are how life insurance companies gauge the cost of life insurance for customers.

Generally, this is how ratings will progress: super preferred, preferred plus, preferred, standard, and approximately eight table ratings. Different insurers can use different names for rating levels. However, the concept is the same. For table ratings, each table rating has a slightly higher cost charged for life insurance coverage and the table ratings go one through eight. In Mary’s circumstance, she would probably be offered a life insurance policy with a table one or table two rating.

35-Year-Old Computer Analyst

The next example is for Harry who is a 35-year-old computer analyst. When Harry was 25, he began to experience periods where he was full of energy. Paradoxically, then his mood would dramatically go down, and he became much more agitated. The changes in his mood would seem to last for several weeks then it would go up. He’d be back to feeling full of energy and not needing much sleep. After several months of having swings in his mood, Harry saw a psychiatrist, who prescribed Lamictal to help with his mood swings.

The medication worked very well. It took about six months to determine the right dosage, and Harry has been on the same medication for ten years. He has had no dramatic changes in his mood or physical health.

In Harry’s circumstance, he would probably get a standard rating for purchasing a life insurance policy. Two determining factors the underwriter would consider is the length of time that Harry had been managing his bipolar disorder. And second would be the fact that Harry only takes one medication to control his illness.

If you or a loved one has bipolar disorder, there is a possibility that you can obtain life insurance coverage. The most critical aspect of obtaining life insurance if you have bipolar disorder is seeing a mental health professional regularly. Moreover, you can provide your doctor's notes that show a well-documented routine of managing your illness. If you couple good illness management with the other techniques mentioned, you may have a chance of getting the life insurance that you want at a reasonable cost.

The information provided is for guidance in obtaining life insurance for those that have been diagnosed by a licensed medical or mental health professional. There is no guarantee this information will lead to getting coverage. Each application is considered on its own merits by the respective life insurance company to which an application has been submitted. For more information or to discuss how I can help you accomplish your financial goals, there are several ways to contact me. If you are on a desktop, use the blue “Ask Van” button at the top of the page. On mobile devices, you can contact me on Facebook Messenger or, call or send a text to 713-320-6124.

References

American Psychiatric Association. (2016). Diagnostic and statistical manual of mental disorders (5th ed.). Washington, DC: American Psychiatric Publishing.

Psychology Today. (2018, March 5). Bipolar disorder. Retrieved July 8, 2018, from https://www.psychologytoday.com/us/conditions/bipolar-disorder

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