Dec. 27, 2007

On the life insurance application form it asks if I am taking any prescribed medications or have ever seen a doctor for mental or nervous disorder. I have some problems with anxiety, mostly due to job stress, and see a psychiatrist for counseling and have just been started on an anxiety medication. This medication is, however, more popularly known for its use in depression (although that is not my diagnosis).

Do I really have to reveal any of this information when this is a condition that is sure to pass when I change jobs? What happens if I do not declare any of this information? Does one really have to even declare minor medical problems or simple prescription medications on a life insurance application?

Robert, California

Dear Robert,

It is your obligation to answer all of the questions on your life insurance policy application truthfully to the best of your knowledge, and it is also in your best interest.

Most life insurance policies carry a two-year "incontestable clause" that allows the insurance company to challenge a death claim if there was a misrepresentation on the application. If you die within the first two years as a result of, say, cancer, and your insurer learns that your condition was not revealed on your application, your insurer would have the right to deny the claim.

Furthermore, insurance companies will track down your medical records. So if your health insurer has been paying for your treatment or your medication, it is likely that life insurers will find this information. Also, depending on how much life insurance you are applying for, you may be required to take a medical examination.

If the searches of medical records or medical examination turn up your use of a medication that you did not include on your application, the insurer may decide not to issue you a policy, or you may be charged more because the underwriters suspect that the medication is an indication of depression — exactly the result you hoped to avoid.

Assume that the insurer will find out about your condition and take steps to explain the situation ahead of time. You can include an attending physician's statement (APS) from your doctor detailing your condition and prognosis with your application. This will allow the medical underwriters to make their decisions based on your actual condition, not simply on the presence of a medication.

For more information, read The lowdown on life insurance medical exams.

Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.