Why Is Depression a Life Insurance Risk?
You may be surprised to learn that life insurers are just as interested in your mental health as they are your physical health. When you apply for a life insurance policy, your prospective insurance company will ask you for your mental health history, including past diagnoses, therapies, and/or pharmacological interventions. If you have a past or current diagnosis of depression, you might not qualify for the best rates on your policy because life insurers view depression as a risk factor. With some life insurance companies, a record of treatment for depression may even impact an applicant's insurability. In what follows, we'll explain why life insurers view depression as a risk factor and discuss how it will impact your premiums.
Higher Mortality Rates
Psychiatric research has consistently demonstrated that people with depression have significantly higher mortality rates, which is why life insurers regard it as a risk. In fact, people with depression have about 1.81 times the mortality rate of the non-depressed. Part of this inequity can be attributed to the elevated suicide risk associated with depression. The Substance Abuse and Mental Health Services Administration (SAMHSA) estimates the lifetime suicide risk of depression at 6%. However, the higher mortality rates associated with depression have to do with more than the concomitant suicide risk. People with depression also tend to be in poorer health, as the disease has been proven to have a deleterious effect on the following physical functions:
- Autonomic regulation
- Platelet functioning
- Cardiac conduction
- Immune system functioning
- Neurological processes
Distinguishing Types of Depression
Life insurers do not regard all types of depression in the same way. Insurers usually do not view "reactive depression" as a risk factor, for example. Reactive depression describes a short-term emotional response to a specific traumatic event. For instance, if you were on Zoloft for six weeks following a divorce or the death of a loved one and responded well to treatment, you might still qualify for preferred rates. On the other hand, if you have a longstanding prescription for an antidepressant, you might face higher premiums. Many life insurance companies will classify people taking an antidepressant and undergoing therapy in the "standard plus" category, as long as they are otherwise in good health. The "standard plus" category is one step above standard and one step below preferred, the category with the best rates.
