Buying life insurance when you have a history of depression

If you've been treated for depression and worry about qualifying for affordable life insurance quotes, don't despair. Underwriters have lightened up in how they view the illness.

depression"In the past, a mild case of depression would only qualify for a standard rating, at best," says Brian Boswell, principal of Blue River Financial Group LLC in Austin, Texas. "Now individuals with mild, controlled and monitored depression and anxiety can qualify for standard-plus and preferred ratings." (Here’s more on underwriting categories.)

Ryan Pinney, brokerage director of Pinney Insurance Center Inc. in Roseville, Calif., says underwriters generally have gotten more comfortable with writing policies for people with depression now that much more is known about the effectiveness and side effects of anti-depressant medication.

"Insurance companies are realizing that majority of clients who are taking anti-depressant medications have good results," he says.

How life insurance companies view depression

Depression is more than just a case of the blues. It's a serious illness in which symptoms lasting two weeks or more interfere with daily functioning. It's also one of the most common mental disorders in the United States. Of the U.S. population, 6.7 percent experience depression in a single year and 16.5 percent of the population experience depression at some point in their lives, according to the National Institute of Mental Health. Even in the most severe cases, depression is highly treatable.

Life insurance underwriters want to eliminate as much risk as possible when their companies issue policies and in the past they viewed depression cautiously, Pinney says. The industry changed in the last two to three years, so that a successfully treated episode of depression is generally a "non-issue" as long as the treatment and outcome are well documented.

"Over the past several years, underwriters have not seen an increase in mortality rates for individuals who are being treated for mild forms of depression and anxiety," says Patric Mascorro, a principal at Blue River Financial Group. "Thus, they've re-examined what underwriting class they're willing to offer."

That doesn't mean that underwriters ignore the issue. As with any health condition, they want details to show that the risk from the illness is contained.

Pinney says life insurance companies look at the issue in terms of the three Cs -- control, compliance and complete medical records. If you've been diagnosed with depression, the insurer will want to know how it was treated, whether it's under control, how it's being monitored and if you followed your doctor’s medical directions.

"Underwriters will also want to know what medications are being taken, what dose and how long have they have been taking that medication," Boswell says.

Depression and life insurance rates

If you’re shopping for a policy, depression is least likely to lead to higher life insurance rates if it was situational -- a limited episode tied to a major life event, such as death of a spouse or a divorce -- and treatment was limited to one medication. Many insurance companies will underwrite applicants at preferred rates who are currently being treated for depression as long as they're taking only one medication to manage symptoms and are routinely seeing their doctors, Boswell says.

"The underwriters will want assurance that your symptoms are being controlled by the medication," he says. "A good impaired-risk insurance professional should be able to find the applicant a policy with a preferred rating, assuming there are no other issues. We have found that waiting until you are off of the medication does not necessarily improve your ratings." (Here’s more on impaired-risk specialists.)

But Mascorro says that your chances of scoring rates at a preferred price are greatly reduced if you’re taking more than one medication. Hospitalization or time spent in a mental health institution due to depression or anxiety also raise a red flag. Underwriters would also take a harder look at chronic depression versus a single episode, and instances of "suicide ideation."

Don't try to hide your history of depression. It's better to offer as much information as you can to show your condition is under control.

"It's best to be honest and up front with your life insurance agent," Pinney says.

Mascorro adds that "someone suffering from depression needs to make sure that their diagnosis, treatment and follow-ups are all well documented. The applicant needs to give the underwriter a very clear idea of the reason for medication and instill confidence that the disease is under control."

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