Why Is Depression Considered a Risk When Purchasing Life Insurance?

When you apply for life insurance, you might think you won't run into any problems if you don't have a chronic disease or a life-threatening illness. But you may be surprised to find out that many insurance companies will consider you a high risk if you have any history of depression.

Pre-Existing Conditions

Life insurance carriers determine who they will cover and the premiums they will charge based on each applicant's mortality rate. Because life insurance carriers make money the longer insurance holders live, they prefer candidates with an outlook for a long and healthy life. The more pre-existing conditions an applicant has, the more likely he will be denied life insurance. Depression is one of these pre-existing conditions that has a statistical chance of shortening an applicant's life span because people suffering it are more likely to commit suicide and self-medicate with drugs and alcohol. If an applicant has a severe case of depression, he may be denied life insurance.

Severity

The severity of your depression plays a huge role in how likely you are to be denied life insurance or charged higher premiums. If you were ever on disability due to depression and thus unable to work or missed work, then you will be a higher-risk applicant. If you ever made a suicide attempt, recorded having suicidal thoughts or if you were hospitalized for severe depression, you're more likely to get denied life insurance coverage.

Medication

The type of medication you take will also play a significant role in whether your depression effects your chances of getting life insurance. If you had what is called reactive depression, meaning you were temporarily depressed due to a traumatic event in your life and only had to take antidepressants for a short period of time, then your medical history might not affect your insurance chances at all. However, if you've been taking antidepressants for many years to treat a chronic depression or if you've been given a high dosage of antidepressants, then you'll find that getting life insurance is much tougher because you'll be viewed as a higher risk who's more likely to have a higher mortality rate.

Shop Around

Insurance companies all differ on the amount of risk they're willing to take on from applicants. If you're denied insurance from one company because of depression, apply to other life insurance carriers. You're likely to find someone who will cover you, even if it's for a higher premium. You can also increase your chances of being approved by complying with treatment and showing documented improvement. If you were just diagnosed with depression, you may be put on a waiting period for a year to show that you're improving and the medication is working. For people with suicide attempts, the wait might be as long as 10 years for some companies.

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About the Author

With features published by media such as Business Week and Fox News, Stephanie Dube Dwilson is an accomplished writer with a law degree and a master's in science and technology journalism. She has written for law firms, public relations and marketing agencies, science and technology websites, and business magazines.

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