life insurance

Will Mental Illness Affect Your Life Insurance Cost?

If you're considering getting life insurance, but you're worried that a history of mental illness will hinder your search and you'll be stuck paying high premiums, worry no more. Insurance companies are generally most concerned if your condition will affect your life expectancy and make you a high death risk. If you took Xanax for anxiety or anti-depressants after a tragedy, your life insurance company probably won't view you as a significant risk.

Times of reactive depression-depression that is triggered by a tragedy-won't affect the cost of your life insurance if you can show your insurance agency that you took the steps to get better. By showing them your medical records and being honest about your condition, you'll be more likely to get better rates and premiums. "If you hint at a problem, but don't say whether you are taking care of it or have been treated for it, the life insurance companies won't know what to think," says David Roush, CEO of Insurance.com. "The less they know about your situation, the higher the risk they will see you as," says Roush.

Even when it comes to more serious cases of clinical depression, like manic depression or bi-polar disorder, life insurance companies won't necessarily give you a higher rate. If you are taking care of the problem, and they see that you are in control of the situation, you won't have as hard a time finding affordable life insurance, as you would if you left your disease untreated.

When to apply
If you are diagnosed with a mental illness and are getting treatment, it would be wise to wait a couple months before applying for life insurance. In doing so, you are giving your body adequate time to adjust to your medication and treatment.

What your insurance agent will want to know
Life insurance companies will want to know when you were diagnosed, who your doctor is, what kind of treatment you received and how you are progressing with your treatments.

Suicide red flag
If your medical history shows one or more suicide attempts, a life insurance company will want to see proof that you are receiving full treatment before they will consider issuing you a policy. With a suicidal history, most companies will wait one to two years before issuing you a life insurance policy. It will probably be more expensive the first few years, and may include a "suicide clause" that denies death benefits to be paid out if the insured dies from suicide within the first two years.

If an applicant is hospitalized for suicidal tendencies or for attempting suicide, they are considered a higher risk than a person who has suicidal tendencies, but is able to function in society, goes to work and has been taking medication to treat the illness. Again, by showing your life insurance company that you are taking care of yourself and your condition, they will be more open to consider issuing you a lower-rated premium.