I’ve had mental illness. What will it mean for life insurance costs?

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Q. I’ve been treated for depression and anxiety and I take medications for this. I’ve never been hospitalized or anything. Will life insurance premiums be higher? I’m of a good weight and I don’t smoke.
— Needing a policy

A. We hope you’re still taking care of your mental health.

Like anything with life insurance, the details matter.

Let’s start at the beginning.

All fully underwritten life applications that are approved will conclude with an “offer” from the insurance company, said Ed Gaelick, a Chartered Life Underwriter and Chartered Financial Consultant with PSI Consultants in Glen Rock.

The offer could be a Preferred Best rating, which has the lowest premium, all the way to a high risk rating, or anything in between, he said.

Gaelick said ratings are based on overall health, build, smoking status, drug use, family history and lifestyle choices, such as whether you’re a rock climber, you like to race motor vehicles, and more.

“So someone with depression and anxiety will very likely pay more than someone without these conditions, everything else equal,” he said. “The key is, `Is a particular condition controlled?’ whether through medication, counseling or both. That will certainly help improve a rating.”

As an example, someone with elevated blood pressure can still get a Preferred rate provided it’s controlled, unless the applicant is very overweight, smokes or has a significant history of some other health issue such as cancer, heart disease or diabetes, he said. That applicant would certainly not be eligible for a best rating, he said.

“So it’s an overview of everything, however, some health issues are enough of an underwriting concern that even if controlled will result in a higher rate,” Gaelick said. “Depression and anxiety are very likely two examples. So I’d set your expectations of some rating other than Preferred.”

Gaelick said it’s important to remember that if a policy is issued at a higher rate and the insured’s health improves, a rating can always be appealed.

“The insurance company cannot make anything worse, only better,” he said. “Some examples of common appeals are maintained weight loss, becoming a former smoker and cholesterol improvement.”

Finally, Gaelick said, the insurance company you choose is critical.

“Some are more tolerant with depression and anxiety than others,” he said. “An experienced broker should be able to identify the carrier that would increase the odds of a better rating.”

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This story was originally published on March 8, 2023.

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