How Does Anxiety Affect Buying Life Insurance?
Applying for Life Insurance If You Have Anxiety
One of the biggest concerns life insurance underwriters have when evaluating an applicant with anxiety is drugs and/or alcohol abuse. If you are self-medicating with drugs or alcohol or there is a history of misuse, life insurance companies will tread very lightly. These situations will be looked at on an individual basis as to whether coverage can be offered.
Your best chances of getting approved for life insurance with a current anxiety diagnosis or history of is to apply online at Quotacy. As an independent broker, your dedicated agent can take your case and shop it to the different top-rated life insurance companies we work with.
Not all life insurance companies underwrite, or evaluate, medical conditions in the same way. Anxiety being one of them. The company you choose to apply to can make all the difference.
The Cost of Life Insurance with an Anxiety Disorder
The cost of a life insurance policy is determined by the risk class you’re assigned. Risk classes are assigned during the underwriting process.
Life insurance underwriters evaluate an applicant’s risk by reviewing their medical records, results of the life insurance medical exam (if you’re required to get one), and the application. The less risky you are, the better your rate.
Life Insurance Risk Categories
Preferred
The preferred risk category includes Preferred Plus and Preferred. An applicant in this category is healthy and the insurance company isn’t taking much risk by insuring them. Applicants in these categories pay the lowest life insurance rates.
Standard
The standard risk category includes Standard Plus and Standard. Applicants deemed standard plus are generally in good health, but a specific medical issue or lifestyle factor prevents them from being given a preferred rate. The standard risk class is for people who are of average health.
Table-rated
Life insurance companies want to be able to offer coverage to as many people as they can. Sometimes, however, applicants carry more risk than the insurance company is comfortable with. The insurance company balances this risk by requiring the applicant to pay an increased rate. Table ratings run alphabetically or numerically depending on the company. The higher the table rating, the higher the rate. For example, if you get a table rating of “A” or “1”, you pay 25% more than the standard rate. If you have a “B” or “2” rating, you pay 50% more, and so on.
Different life insurance companies offer different risk classes depending on their underwriting guides and evaluations. This is why it’s imperative to shop around if you have a medical condition, like an anxiety diagnosis. Your rates may vary drastically from one company to another.
Consider the real-life client example below.
Example
John Smith* is a 52-year-old non-smoker applying for a $500,000 20-year term life insurance policy. He was diagnosed with GAD (generalized anxiety disorder) with a history of panic attacks and a nervous breakdown due to a stressful work environment. He is no longer at that job.
John is now doing well with treatment consisting of prescription medication (Prozac, Wellbutrin, Klonopin) and cognitive-behavior therapy.
When his Quotacy agent anonymously shopped John’s case to our insurance companies, their offers varied considerably.
Some carriers wouldn’t even offer him life insurance coverage. Another would only offer him Table 3. However, one company was more lenient and offered Standard.
See the table below to see how risk class affects the price you pay for life insurance.
John decided to go with the company that offered him Standard and his Quotacy agent helped get his policy active.
*Client name and some personal details have been changed.
This is just one example of many clients we have helped get life insurance coverage. Your individual factors will determine if you can get coverage and at what cost.
It’s also important to note that age impacts the cost of life insurance. Referencing John’s example above, if he was buying life insurance at 35 instead of 52, his proposed rates would be much lower.
