Obtaining a life insurance policy with a mental illness will entirely depend on the amount of experience that the agent has. Inexperienced agents are likely to say that it’s either impossible or that it’s entirely possible. The answer actually lies between these two extremes, which like any other condition and life insurance, will all depend on the severity of the illness and the company that you choose to apply with. You will not be able to effectively find an answer online by running online quotes, because companies weigh risk differently, which is why you must reach out to a company to find a viable answer. With that being said, here are a few factors that should be considered when it comes to obtaining life insurance coverage with a mental illness.
Why Weighing Risk is Important
Life insurance companies take a few things into consideration when coming up with the rate that they give to you. These usually fall into three factors, which include the following:
- What Kind of Mental Illness you Have – The most important consideration is what kind of mental illness you have. Anything within the category of depression and anxiety is not viewed as harmful and does not interfere with your everyday life. Therefore if you are active and working, then you should easily be able to receive coverage at a decent rate, as long as other factors are well. With a mental illness such as bipolar disorder, then you will be more than likely rated at a much higher level.
- The Severity of Your Mental Illness – Severity is key for determining rates for your life insurance coverage. The severity of your mental illness ranges from mild, moderate, to severe, with severe being the biggest concern among life insurance companies. A severity rating can lead to increased rates or even being denied coverage, depending on the company. Severity usually includes factors such as disability or frequent hospitalizations within a specific amount of time. As stated previously, if you are living an active and social life, then you should not have any issue obtaining coverage. This issue only pertains to those that the illness is hindering them from living a “normal” day to day life.
- Any Factors Outside of Your Mental Illness – The last thing that life insurance companies will look at are any factors outside of the mental illness. This will include physical health, any habits (drinking, smoking, etc.) and what you are actively doing to improve your lifestyle. Treatment is something that they do take into account and it can prove to them that you are taking steps to make your life better. Considerably experienced agents should be able to help you with this process.
In terms of severity, there are ways that they adequately measure this and locate a proper rate.
Breaking Down Severity Rates
The break down of these rates include the following:
- Preferred Plus/Preferred – This usually pertains to a rate class given to individuals that are healthy with no medical conditions or a family history of serious illness. This severity rating is by far the most advantageous and is the absolute best monthly premium possible. People who classify as “mild” in severity level will usually fall within either preferred or standard rating.
- Standard Plus/Standard – This rate is assigned to individuals that have a family history of existing medical conditions or that do not qualify based on building for the preferred class. Majority of individuals will fall within this rate class, but the rates are not extremely expensive. People with a “mild” severity level will usually receive this rating.
- Substandard – This rating is more complex and actually has a table assigned to it, that ranges from 1 to 10. Each table is a 25% increase in the premium charged, and people who get a substandard rate are usually considered higher risk by the insurance company. Anyone that is given this rate will have to pay a substantially higher rate for life insurance. The higher the table number, the higher the payments will be. People within the “Moderate” or “Severe” level will usually fall into this rating. “Moderate” would be if you have had a few episodes in the past, but are currently undergoing treatment with no suicide and hospitalization. “Severe” would fall under the category of being disabled or you have been hospitalized. “Severity” can either lead to a substandard rating or outright being declined.
Overall, yes you can obtain life insurance with a mental illness, your life insurance company will just have to conduct analysis in order to figure out what rating to give you. Having said that, there is no need to be concerned, obtaining coverage will ultimately come down to taking the right steps. Once these are conducted, you more than likely are going to walk away with life insurance coverage and a decent premium.
