Term Life Insurance Articles
How Depression Affects The Cost Of A Life Insurance Policy
2011-12-16
Life insurance companies take a closer look at those with a history of depression in order to determine what kind of risk the individual is. Falling into a certain category for depression increases the likelihood that the individual is going to commit suicide at some point, as unfortunate as that sounds. A life insurance policy does pay out in the event of a suicide, which plays into the rising costs of the coverage. Because of this, the insurance company is going to charge higher rates for those who have had a diagnosis of depression.
The definition of depression for a life insurance policy is varied as the insurer recognizes that there are different forms that people can suffer from. Someone who has had a temporary brush with "the blues" and never relapses gets put into the general risk pool with those who have not suffered from depression. An individual who has had depression for more than four months consecutively is going to get put into a higher risk pool. The same goes for those who have bipolar disorder or severe depression. They can still get a life insurance policy, but at the higher rates. Rising costs accompany the risk pool, going higher with each consecutive category.
Taking certain medications also places the individual into a higher-risk category. Anyone who admits to self-medicating with drugs and alcohol is instantly declined as he is a risk that no underwriter wants to take on.
Tables are used as a means of classifying the type of depression, how much the applicant is going to pay and how long the applicant stays in that classification. As noted before, someone who has suffered from mild depression brought on by life events goes into the standard rates and pays the same premium as everyone else. Someone who has bipolar disorder but has controlled it successfully with medication may go into the standard pool or into a higher risk category. Poorly controlled bipolar disorder and uncontrolled or severe depression are the classifications that are most likely to be declined or postponed until the issues improve.
It should be noted that the life insurance company is not making any kind of judgment on the fact that the individual suffers from depression. Rather, it is a weighing of the risk that the individual poses when he presents an application with a history of depression.
The best thing to do when applying for a life insurance policy with a history of depression is to be up front with the company that is being applied to. Being honest with the insurer from the beginning gives the insurer more options to work with while seeking the best policy possible.
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Life insurance companies take a closer look at those with a history of depression in order to determine what kind of risk the individual is. Falling into a certain category for depression increases the likelihood that the individual is going to commit suicide at some point, as unfortunate as that sounds. A life insurance policy does pay out in the event of a suicide, which plays into the rising costs of the coverage. Because of this, the insurance company is going to charge higher rates for those who have had a diagnosis of depression.
The definition of depression for a life insurance policy is varied as the insurer recognizes that there are different forms that people can suffer from. Someone who has had a temporary brush with "the blues" and never relapses gets put into the general risk pool with those who have not suffered from depression. An individual who has had depression for more than four months consecutively is going to get put into a higher risk pool. The same goes for those who have bipolar disorder or severe depression. They can still get a life insurance policy, but at the higher rates. Rising costs accompany the risk pool, going higher with each consecutive category.
Taking certain medications also places the individual into a higher-risk category. Anyone who admits to self-medicating with drugs and alcohol is instantly declined as he is a risk that no underwriter wants to take on.
Tables are used as a means of classifying the type of depression, how much the applicant is going to pay and how long the applicant stays in that classification. As noted before, someone who has suffered from mild depression brought on by life events goes into the standard rates and pays the same premium as everyone else. Someone who has bipolar disorder but has controlled it successfully with medication may go into the standard pool or into a higher risk category. Poorly controlled bipolar disorder and uncontrolled or severe depression are the classifications that are most likely to be declined or postponed until the issues improve.
It should be noted that the life insurance company is not making any kind of judgment on the fact that the individual suffers from depression. Rather, it is a weighing of the risk that the individual poses when he presents an application with a history of depression.
The best thing to do when applying for a life insurance policy with a history of depression is to be up front with the company that is being applied to. Being honest with the insurer from the beginning gives the insurer more options to work with while seeking the best policy possible.
