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Life insurance & mental health: Your questions answered

To help you navigate any confusion on life cover for mental illness, here’s a rundown of what may and may not be covered by your insurance.

Young woman at a therapy session

Unfortunately, it isn't a given that life insurance policies will let you claim for mental health. But it is possible to get cover. Here are answers to some of the most frequently asked questions, including input from financial and health experts.

Does life insurance exclude mental health?

Some policies do, but others will offer cover for specific types of mental illness. Whether you'll be covered or not depends on things such as the severity of your condition and your medical history.

You'll be asked to disclose any conditions at the time of applying for cover. An insurer can check your medical records during the process of underwriting, so it's important to be upfront.

Based on your application, your insurance provider may decide to cover you for an added premium. Or, they can exclude any claims for mental health but will cover you for any other claims in your policy.

If you've any doubt about what's included in your policy, ask your insurer.

Financial adviser Phil Thompson commented:

"Insurance doesn't [completely] exclude it, but it is a very common exclusion. If you've ever seen a psychologist or a counsellor in the last few years, they'll probably put an exclusion on your policy – even if it's got nothing to do with a diagnosed condition."

Does anxiety affect life insurance?

Yes. Anxiety can be considered a pre-existing condition and providers tend to treat pre-existing conditions in a different way than regular cover.

Again, you'll usually have to disclose your condition at the time of application. It can mean that you have a higher premium for your insurance, or won't be covered for claims related to your anxiety.

Nathan McCullum, Director and Private Client Adviser, McCullum Advisory, said:

"Underwriting anxiety as a mental health condition can be challenging, due to its complex nature. Anxiety covers a large group of related conditions.

In most cases, applying for life insurance isn't an issue for anxiety sufferers... [but] anxiety and mental health conditions do affect benefits when applying for Total Permanent Disablement (TDP) and income protection insurance. In most cases, anxiety is a pre-existing condition for TPD.

Anxiety disorders tend to impact social, occupational and other important areas of functioning that could give raise to a claim. Such signs could include being easily tired, muscle tension, sleep disturbance, feeling on edge – which all impact someone's day-to-day life.

The underwriter needs to consider many factors, including the impact of the applicant's occupation on this condition and whether the occupation itself is likely to affect an individual's prognosis.

They will decide what pre-existing conditions need to be waived/excluded on the policy summary, taking into account the duration of the illness, time off work and general wellbeing."

Can I get life insurance if I have anxiety?

Yes, it's still possible to get cover if you have anxiety. You will likely be asked to provide details of your condition at the time of application in the form of an online questionnaire or health check. Depending on your condition, it is possible your insurer will include additional exclusions or a higher premium for a certain period of time.

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Can you get life insurance if you have depression?

Yes, you can still take out a life insurance policy if you suffer from depression.

It's important that you disclose your illness at the time of applying so that your insurer can take any increased risks into account. This could mean higher premiums, a shorter period of insurance or additional exclusions that may not otherwise apply.

Some insurers may refuse to cover you altogether depending on the severity of your depression and medical history.

Can a life insurer ask for information from my treating doctor?

Yes, it can, according to Dr. Deepak Gaur, who has conducted medical exams for insurance assessments such as life insurance and workers' compensation.

Dr Gaur added: "A mental health diagnosis is assessed with the same principles as all other medical conditions. The nature of a person's symptoms, the investigations that may have been performed, the response to medical treatment including medications, procedures, and hospitalisation, will provide valuable information on the prognosis and the likelihood of additional treatment.

"A third party expert such as a psychiatrist may also be requested to provide an additional opinion."

Does seeing a psychiatrist or psychologist affect life insurance?

Yes. Whether or not you'll subsequently be able to get cover depends on factors such as how long ago you sought treatment and the severity of any condition that has been diagnosed.

When it weighs up your risk of making a claim for a mental health condition, the underwriter of a life insurance policy may seek further information on your medical records during the application process.

Can you get life insurance if you have schizophrenia?

Getting life insurance when you have schizophrenia can be tricky. While many insurers don't call the condition out as an exclusion, they may decline your application once more information is provided. It's important to disclose your medical history at the time of your application for insurance so you're clear on whether or not you're insured.

Is mental health covered by income protection?

It depends on the specifics of your policy. Mental health can be covered by income protection as long as you have medical proof that your illness is the reason you are unable to work.

Some of the providers who offer some cover for mental health include:

Similar to life insurance, if your condition exists or has done in the past, you must disclose it. From there, your insurer will decide whether to cover you at no extra cost or include any additional exclusions.

What could happen if I don't disclose something about a past mental health condition?

If you've failed to disclose something about your circumstances when filling out your insurance application, your insurer will likely refuse a claim in the future or cancel your policy.

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