Life Insurance with Depression

Getting Mortgage Protection if You Suffer Mental Health Issues

Welcome to our blog on life insurance and depression.

Here, I aim to provide insight and support for those who may be struggling with both depression and the process of obtaining life insurance.

I know that it can be a difficult and overwhelming experience and I hope to be a source of empathy and understanding as you navigate this important aspect of your life.

In this article, I’ll go through the procedure for applying for life insurance, mortgage protection and income protection when you’re suffering from depression or where you had an episode of depression in the past.

I’ll explain:

how the insurance companies define depression,
how depression affects life cover applications and
the kind of questions the insurer will ask when you apply

Depression / depressive illness / clinical depression / reactive depression is an illness.

It is very different from the common experience of feeling unhappy, miserable or fed up for a short period.

In depression, there may be feelings of extreme sadness that can last for a long time.

These feelings are severe enough to interfere with daily life and last for weeks or months rather than days.

The insurance companies categorise depression by how serious it is:

Mild depression – has some impact on daily life
Moderate depression – has a significant impact on daily life
Severe depression-  makes the activities of daily life nearly impossible.

People develop depression for different reasons, and it has many different triggers.

For some people, upsetting or stressful life events, such as bereavement, divorce, illness, redundancy and job or money worries, can trigger depression.

In most cases, GPs will help manage a patient’s depression. However, for some people, particularly those with more severe depression or where treatment is not successful, more specialised care, including a hospital stay, may be needed.

How does depression affect your life insurance application?

These are the factors that underwriting examines when reviewing an application for life insurance with depression:

The severity of depression?
If historical, how many episodes?
If current, is it chronic?
Any history of suicidal thoughts?
Any associated alcohol or substance abuse?

In cases of mild depression, it’s possible to cover at the standard rate. However, if depression is moderate or severe, it’s not unusual for the insurance company to increase your price by 50% to 150%.

And that’s where we come in – to make sure you get cover with the insurer offering the lowest rate. Why pay more than you need to?

We’ll ask you to complete a mental health questionnaire containing questions such as:

When did you first consult a doctor about depression?
What was the nature, frequency and duration of the symptoms?
Provide details of the most recent symptoms.
Have you been treated with drugs?
Have you ever received hospital outpatient treatment?
Have you ever been an inpatient at a hospital?
Have you ever attempted to take your own life?
Did any particular factor trigger the depression? (work stress, accident, bereavement)
What is the exact diagnosis? (e.g. depression, schizophrenia, mania, neurosis).
Have you been out of work with this condition? If so, please provide dates and duration.

We’ll then discuss your case anonymously with all five insurers to ensure you apply to the one that offers cover at the lowest rate with the least hassle.

Depending on your responses, a life assurance company may offer you cover based on the questionnaire alone. If they need more information to decide, they will write to your GP for a medical report.

Once the underwriters have received all medical evidence, they will decide to offer you cover, postpone their decision or decline offering cover.

Case Study | Depression after a marital breakdown

Going through a marital breakdown and suffering from depression can be a difficult and trying time in life. However, most life insurance providers will consider you for coverage, even if you have a history of depression. It’s best to be honest and upfront with the insurance company about your medical history, because the insurer will request a medical report from your GP as part of the underwriting process.

Most insurers will class this as mild anxiety and offer you the normal price.

But what about income protection?

Generally, the insurers will exclude a pre-existing condition from your policy, so if you have a history of depression, the insurers will exclude mental health issues as a reason to claim on your policy. But, as with all medical conditions, it pays to use a specialist broker to get you the best policy.

Molly separated from her partner four years ago.
She suffered anxiety and sleeplessness.
She last had symptoms three years ago.
Throughout the period of stress, she took valium occasionally.
She attended counselling but wasn’t referred to a psychiatrist.

I discussed her case with all five providers of income protection:

Insurer 1:

A Mental Health Exclusion would apply here for Income Protection

Insurer 2:

As over 3 years ago since last symptoms and no current treatment, we do not feel an exclusion is justifed. We would offer full cover.

Insurer 3:

Unfortunately, as your client had treatment in the last five years, we would exclude mental and functional health disorders.

Insurer 4:

Given that trigger was divorce proceedings and last symptoms >3 yrs ago, no MH exclusion would apply – we would treat as mild anxiety

Insurer 5:

There would be a minimum of MH exclusion here for IP subject to full underwriting.

As you can see, three of the five insurers would have excluded mental health cover from their policies.

Molly was delighted to get full income protection coverage.

The moral of the story – use a specialist protection broker and if you have been hit with an exclusion, get in touch; we may be able to get you better terms.

Over to you…

Do you need life insurance, or mortgage protection or are you considering income protection?

Would you like some help finding the most understanding insurer?

Complete this mental health questionnaire, and I’ll be in touch (alternatively call me personally on (01) 693 3382 if you’d like a chat first)

Choosing the most suitable insurer and correctly packaging your application is a very important first step.

We know the insurers who are more considerate when it comes to assessing life insurance with a history of depression.

We’ll help you through the application process and advise the best course of action to obtain your life insurance at the lowest possible price, with the least amount of hardship.

I know it can be stressful answering personal health questions to a stranger, but I have arranged life insurance for many clients who have experienced periods of depression in their lives.

All of our discussions will be on a strictly confidential basis.

Talk soon

Nick

Link to an Irish Times piece I featured in (Feb 7 2017)

*This blog was first published in 2017 and has been regularly updated since.