- Life Insurance and Depression: Background
- Can you Get Life Insurance with Depression?
- Does Life Insurance Cover Depression?
- What Type of Life Insurance Rates can you Get with Depression?
- Does Depression Affect Life Insurance Rates, and How?
- No Medical Life Insurance and Depression: Rates
- What is the Best Life Insurance for Depression?
Life Insurance and Depression: Background
Depression is a serious mental health issue that affects millions of Canadians. According to Statistics Canada’s 2012 Canadian Community Health Survey (CCHS) on Mental Health, 5.4% of the Canadian population aged 15 and over reported symptoms consistent with major depression in the 12 months prior to the survey.
A survey on COVID-19 and mental health, conducted from February to May 2021, found that one in four (25%) Canadians aged 18 and older reported experiencing symptoms consistent with major depression since the start of the pandemic. This is significantly higher than before the pandemic, when an estimated 8.2% of Canadians reported experiencing major depression. The highest rates of anxiety and depression were reported among those between 18 and 39 years old, with 33.5% for anxiety, 29.1% for depression and 25% for loneliness.
It is important to seek help if you or someone you know is struggling with depression or other mental health issues. Treatment options such as therapy and medication can help improve mental health outcomes and reduce symptoms of depression.
Individuals with a history of depression can often still obtain life insurance. The insurance company will assess the current condition and the likelihood of it worsening. It is important to note that when seeking insurance, depression is considered a pre-existing condition that can affect the decision to offer a standard policy, a rated policy or possibly even a decline. In cases where depression is a severe issue, no medical life insurance policies are worth exploring.
- Traditional life insurance assumes full underwriting (i.e. a long list of questions and lower premiums) plus, in some cases, an in-person medical exam.
- No medical life insurance comes without a medical exam and has either a short questionnaire (simplified issue life insurance) or no questionnaire at all (guaranteed life insurance).
Below, we will look in greater detail at the factors determining your ability to qualify for life insurance with depression and what types of insurance best suit your situation.
Can you Get Life Insurance with Depression?
Yes, you can get life insurance with depression and depending on your condition, there are multiple options available. If you have depression as a pre-condition, the following questions help underwriters determine which type of life insurance policy best suits your needs:
- When were you first diagnosed with depression?
- What type of treatment do you receive for depression? (e.g., medication, therapy)
- How often do you visit your healthcare provider for depression-related issues?
- Have you ever been hospitalized for depression? If so, when and for how long?
- Have you attempted suicide in the past year?
- Do you have a family history of depression?
- Have you had any work/school absences due to depression symptoms?
- Has your depression affected your ability to carry out daily activities or work?
- What is the severity of your depression?
- Have you had any changes in medication or treatment for depression within the past year?
The answers to these questions help underwriters determine the level of risk associated with offering life insurance coverage to an individual with depression. The severity and control of depression, along with past and potential related health issues, will be evaluated before a decision is made on coverage and premiums. Luckily, in most cases, people with depression can still qualify for no medical life insurance.
Does Life Insurance Cover Depression?
Life insurance does provide coverage for depression and anxiety, depending on the severity of the condition and the recency of episodes. For individuals with mild episodes of depression, which occurred more than one year ago, standard rates may apply, similar to those without depression.
If a mild or moderate episode is relatively recent, a rated insurance policy may be available with costs of up to 150% of the standard price (150% rating) applied. In cases where a serious episode of depression occurred more than one year ago, some insurers may offer life insurance but rates may be bumped up to 200% or higher (200% rating).
However, if an episode of depression was severe and recent, requiring time off work or hospitalization, it is likely that the insurance application will be denied until more time passes. In such severe cases, an option for individuals is to consider one of the no medical life insurance policies, which come with certain limitations. These policies either ask a limited set of questions about medical conditions (simplified issue no medical life insurance) or do not have a questionnaire at all (guaranteed issue life insurance).
What Type of Life Insurance Rates can you Get with Depression?
There are a variety of life insurance policies you can get if you have a history of depression.
| Insurance Type | Medical Exam | Detailed Medical Questionnaire | Short Questionnaire | Coverage Limits | Important to Know |
| Guaranteed Issued Life Insurance | – | – | – | $40K | Yes. Anyone can qualify for this one. |
| Simplified Issue Life Insurance | – | – | ✓ | $1M | Many will typically qualify. Questionnaires will vary across providers. |
| Traditional, Medically Underwritten RATED Life Insurance | ✓ | ✓ | – | $5M+ | This is the most likely scenario for people with recent (within one year) episodes if the episodes were mild or moderate. Ratings go up to 150%.
For severe cases, after one year a successful applicant would likely be rated at 200% at a minimum. |
| Traditional, Medically Underwritten Life Insurance with STANDARD RATES | ✓ | ✓ | – | $5M+ | Possible with mild cases that occurred a year, or longer, ago. |
Does Depression Affect Life Insurance Rates, and How?
When underwriting life insurance policies, companies typically consider the severity of depression, its date of last occurrence and the need for time off work or hospitalization. Higher rates apply for more severe conditions. For serious cases, such as after a suicide attempt or hospitalization, a standard life insurance application can be declined.
Here is an overview of how three insurers handle underwriting when depression is a pre-condition for the applicant.
| Mild non-recent cases | Mild/moderate recent cases | Severe recent cases including time off work / hospitalizations | |
| Insurer A | Standard rates for applicants in long-term remission even if medicated, provided there has been no recent increase or change in medication. | Some sufferers of chronic mild depression are insurable, however, a medical rating may be used and the rating will depend on the severity of the condition. | Recent cases are not typically insurable until the applicant has been recovered for at least six months. |
| Insurer B | If only one mild episode, a possibility of standard rates. | If multiple mild episodes or a moderate case, the rating can be as high as 150%. If there were any suicide attempts, the rating will be higher. | If off work at the time of application, the result will be a decline. The applicant may try again in a year if they have undergone treatment |
| Insurer C | For mild/moderate cases, if over 1 year since diagnosis, consideration is a standard risk. | For mild/moderate cases, if diagnosed within 1 year, expect a minimum rating of 150%. | Postponement if the applicant is not working due to the condition. The applicant can apply again after they have been working full-time for at least 6 months.
All severe cases may be considered after 1 year from diagnosis with a minimum rating of 200%. |
No Medical Life Insurance and Depression: Rates
No medical life insurance rates depend on a variety of factors, including age, policy type and health condition. Simplified issue policies offer coverage up to approximately $350,000 and are typically priced between traditional and guaranteed policies. On the other hand, guaranteed issue policies provide coverage up to approximately $30,000, making them the most expensive option. They also do not pay out for any death related to illness during the first two policy years, but the beneficiary will receive the premiums if the insured passes away during this time. Overall, the cost and coverage amount of no medical life insurance policies can vary significantly, making it important to weigh all options and factors when choosing the right policy. The most efficient way to do this is with the use of a broker.
The following sample quotes are for a 40-year-old male, non-smoker and in reasonably good health. The coverage is for a 20-year term. These quotes show how big the range in premiums is among insurance agencies. It is important to with a broker that can connect you with the best application process and policy for your needs and for your budget.
Sample cost of simplified issue insurance: Coverage of $40,000: Policies range from $11/month to $17/month. Should you go for a policy with 10x coverage ($400,000), the monthly costs will range from $40/month to $144/month.
Sample monthly cost of a guaranteed issue insurance policy for the same low coverage of $40,000 as offered by one of the Canadian life insurers, would be around $90/month.
What is the Best Life Insurance for Depression?
It is recommended to collaborate with an experienced life insurance broker who has access to a wide range of life insurance policies. They can compare application criteria for depression across various insurance companies to get you the best rates and coverage. Our experienced life insurance brokers are here to assist you in every step of the process. Simply fill out the quote request form to begin.
