What You Should Know About Life Insurance for People With Depression

Up until recently, mental health conditions were rarely talked about and grossly misunderstood. While there continue to be some confusion, false assumptions and stigmas related to mental illness, these are fading away. In fact, many celebrities are even talking openly about their personal struggles with mental illness now. One of the most common types of mental illness is depression, but there is still some misunderstanding about this common condition. Because of this misunderstanding as well as the varying implications that it may have on your life, it can be challenging to purchase life insurance when you have been diagnosed with depression.

Understanding What Depression Is

Some people assume that depression is simply when someone is sad. While this may be the loose definition of being depressed, true clinical depression is a mood disorder that is diagnosed by a medical professional and that can be treated with medications, therapy and other treatments. It may be caused by many factors, including major life changes, genetics, a history of physical or emotional abuse, substance abuse and more.

For some, depression is a one-time condition that is treated and overcome. For others, depression can be a lifelong struggle. Because there is a risk of suicide as well as an increased prevalence of risk-taking, drug abuse and alcohol abuse with depression, life expectancy may be lower. Even if it is something like taking up smoking, life insurance for smokers is more difficult to obtain and more expensive than it wold be otherwise.

Exploring How Depression Can Impact Life Insurance Options and Rates

When life insurance companies determine your coverage eligibility and rates, they often review your risk factors and life expectancy. Numerous factors are analyzed during this process, including your gender, age, physical health exam results and more. Depending on the type of mental illness that you suffer from, your life expectancy may be a decade or two less than a similar person without depression. It is considered much the same way that other factors are considered when looking at life insurance for people in bad health.

There are many types of depression, such as major depression, bipolar depression and others. While some depressive episodes are one-time events, others are recurrent or constant. In addition, the severity of symptoms can vary dramatically. A person's response to treatment as well as their ability to follow self-care instructions by their medical team will vary as well. Each of these factors complicates the life insurance purchase and pricing processes.

Keep in mind that life insurance companies will look at your condition as well as treatment steps that you have taken. For example, if you have followed a treatment plan for several years, you may qualify for better rates than if you were diagnosed several years ago and have never sought treatment.

Life Insurance for People With Depression

Finding Life Insurance Options with Depression

As you might expect, there is no uniform method for how life insurance companies analyze depression. Some providers may be much less restrictive regarding coverage options and may offer better rates than others, so comparing the options thoroughly is a smart idea. As you explore the many options for life insurance with depression, the first step involves understanding what common coverage options are and how they may be suitable for your needs and goals. These are some of the more common options that you may consider.

  • Term Life Insurance: When you set up a new policy for life insurance with depression, be aware that the term length for your coverage plays a major role in your premium. A shorter-term policy, such as a 10-year term life insurance policy, may be much more affordable than a 30-year policy. Remember that term life insurance is only effective for the length of the specified term. If a claim is not filed within that term period, the policy simply terminates.
  • Permanent Life Insurance: Permanent life insurance uniquely remains effective until a claim is filed or until you stop paying the premium. Therefore, it can span across your entire life. It also notably has a cash value component, and this cash value account can grow to a sizable amount over the years. For individuals who have no pre-existing medical conditions, permanent life insurance may cost much more than term life insurance. This is because it can cover you for your entire life and has the cash value component. The additional factor of depression in your health history may result in a higher premium.
  • Burial Insurance: This type of insurance usually has relatively low death benefits because the benefits are only intended to pay for final expenses. Because of the limited benefits, burial insurance is usually relatively affordable. In many cases, you are not required to complete a medical exam in order to obtain this coverage. Some policies have a waiting period before coverage is fully effective.

It makes sense for many adults to purchase life insurance, but buying life insurance with depression can require more time and effort. Take time to understand the differences between various options and to compare them thoroughly so that you can set up the right coverage for your needs. Get a free life insurance quote today and see what your options are.