Today we will discuss mental and behavioral health, and how these conditions may impact your life insurance rates. Each year millions of Americans face the reality of living with a mental illness. You’re not alone.
Buying Life Insurance with a History of Behavioral or Mental Health Conditions
Many people suffering from a mental or behavioral health condition still apply for insurance and are accepted for coverage. However, life insurance rates might be affected. The good news is that not all life insurance companies view mental health issues the same way.
Quotacy is here to dig through the different life insurance companies to help you find affordable term life insurance rates that keep you and your family covered.
If you have a behavioral or mental health condition, your best chances of getting affordable life insurance is to apply through a broker, like Quotacy. Brokers are not tied to one life insurance company and are able to shop the market.
We want you to get approved and will work hard to help you get coverage. Start the process by getting a free term life insurance quote or keep reading for more in-depth information about life insurance and mental health.
See what you’d pay for life insurance
Mental and Behavioral Disorders and Life Insurance
There are many different types of mental and behavioral disorders and each are underwritten independently. Someone with a history of anorexia is not going to be underwritten the same as someone with dementia. These are two very different diagnoses with different treatment plans and have different levels of insurance risk.
Life insurance companies also have to consider that the same disorder may impact individuals differently. Two people diagnosed with post-traumatic stress disorder (PTSD) may have very different symptoms and lead opposite lives. So, not only do underwriters have to evaluate the disorders independently, but also on a case-by-case basis.
For applicants with a history of a mental or behavioral disorder, underwriters have many factors to consider and evaluate:
- The applicant’s physical and mental health
- The applicant’s job and employment history
- The applicant’s social activities and family dynamics
- Whether there is evidence of substance abuse (particularly alcohol)
- If there is any history of suicide attempts
- If applicant has any chronic medical conditions (such as heart disease)
- The severity and duration of the applicant’s diagnosis
- The applicant’s treatment history
Life insurance underwriters determine whether or not you will be approved for life insurance and which risk class you belong in. The better your risk class, the lower your premiums will cost.
|Characteristics Underwriters Assess to Determine Risk Class|
|Favorable Characteristics||Unfavorable Characteristics|
|Stable environment and occupation||Occupational instability|
|No overt marital or family disharmony||Work-related pressures/stresses|
|No criticism of habits||Marital and/or family disturbance|
|Good insight into condition||Alcohol/drug misuse|
|No underlying physical condition||Poor insight into condition|
|Good family history||Poor physical health|
|Long duration since diagnosis||Family history of mental disorders|
|Stable personality||Recently diagnosed|
|Good social network and support||Behavior disturbance|
The more unfavorable characteristics you have, the higher the risk to insure you. Depending on your diagnosis and how severe it is, you could qualify for the best risk class (typically referred to as Preferred Plus) or be given a substandard risk class, such as a table rating.
Being table rated means your level of risk is outside the norm and in order for the life insurance carrier to accept you, you have to pay extra to cushion the risk.
If table rated, your life insurance will typically cost the Standard price plus 25% for every step down the table you are. Take a look at the table below to get an idea of how risk class affects what you pay for life insurance coverage.
|The Average Monthly Cost of a 20-Year Term Policy
for a 30-Year-Old Male Based on Risk Class
To get a more in-depth understanding of risk class and table ratings, take a look at these blog posts:
No two life insurance companies underwrite the exact same way.
For example, let’s say the 30-year-old male in the sample table above has been diagnosed with bipolar disorder, but it’s well-managed. Insurance Company ABC may only offer him Table C, which means he’d be paying $49 per month for coverage.
Meanwhile, Insurance Company XYZ would offer him Standard – which would cost him only $28 per month for the same coverage.
Quotacy is an independent life insurance broker. This means that we work with multiple life insurance companies – not just one. If you have been diagnosed with a mental or behavioral disorder, having more company options increases your chances of being approved for life insurance coverage at a fair price.
Most mental illnesses don’t improve on their own, and if untreated, a mental illness may get worse over time and cause serious problems. Don’t be afraid to seek help. 61,500,000 Americans experience a mental health disorder in a given year – you are not alone. Get a free mental health screening at HelpYourselfHelpOthers.org.
Note: Life insurance quotes used in this article accurate as of May 25, 2021. These are only estimates and your life insurance costs may be higher or lower.
About the writer
Natasha Cornelius, CLU
Senior Editor and Licensed Life Insurance Expert
Natasha Cornelius, CLU, is a writer, editor, and life insurance researcher for Quotacy.com where her goal is to make life insurance more transparent and easier to understand. She has been in the life insurance industry since 2010 and has been writing about life insurance since 2014. Natasha earned her Chartered Life Underwriter designation in 2022. She is also co-host of Quotacy’s YouTube series. Connect with her on LinkedIn.