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According to research from mental health charity MIND, 1 in 6 adults suffer from depression or anxiety in any given week in England¹.
The prevalence of mental health conditions in the UK is on the increase, not helped by the physiological and financial pressures caused by the COVID-19 pandemic. Fortunately, this also means awareness is growing.
When it comes to life insurance, insurers now better understand the need to provide financial protection for those with less than perfect mental health.
If you need to arrange life insurance to protect your loved ones’, but you suffer from depression or anxiety, you may wonder how this will affect your application.
If so, continue reading as UK life insurance broker Reassured explain all in this 2021 guide…
What is life insurance?
Life insurance is simply an insurance policy that pays out a cash lump sum to your family should you pass away whilst the cover is in place.
The proceeds can be used to cover mortgage/rental payments, provide an inheritance, as well as meet family living costs. If you have dependents who rely on your income, then life insurance ensures that they would be financially secure if you were not around to provide.
You pay a monthly fee, known as the premium, in order to benefit from the cover protection. Premiums start from approximately 20p a day for £200,000 of cover (or sum assured).
Can depression or anxiety affect your life insurance application?
Yes, if you have been diagnosed with depression or anxiety then this can affect your life insurance application. But do not worry, this does not mean you cannot secure cover or that you will definitely pay a higher premium.
The challenge is that you may need to answer some questions about your condition before your application is accepted. Your responses to these questions will help the insurer better understand your individual circumstances and provide you with a suitable quote.
If the insurer thinks you are more likely to make a claim on your policy due to your depression or anxiety, then they may increase the cost of your monthly premium to mitigate this perceived risk.
Questions you may be asked include:
- When were you diagnosed?
- What treatment are you receiving?
- What are the severity and frequency of your symptoms?
- Have there been any instances of self-harm, attempted suicide or hospitalisation?
The only exception to this is over 50s plans. If you are aged 50-85 you can take out an over 50s plan; these policies guarantee acceptance and do not ask any medical questions during the application.
However, whereas standard cover (such as level term and decreasing term) can pay out up to £1,000,000, an over 50s plans maximum is £25,000. As a result they are commonly used to cover rising funeral costs and/or provide an inheritance (not cover larger debts such as a mortgage).
Does depression or anxiety affect the cover itself?
No, if you have been diagnosed with having depression or anxiety before taking out a life insurance policy, then this will not affect the cover itself.
Your policy will be the same as for anyone else who takes out the policy – the only difference being that you may pay a loading on your premium due to your condition.
What will stop me from getting life insurance?
It is very unlikely that you will be declined life insurance due to depression or anxiety alone.
When sourcing quotes, you will also need to provide the insurers with other information about yourself such as your age, health, weight and smoking status.
These factors are more likely to impact your life insurance options than your mental health condition. Nonetheless, you may be declined life insurance if your depression or anxiety is deemed too high risk. For example, your diagnosis is recent or you’ve self harmed/been suicidal on more than one occasion.
As someone with depression or anxiety, you may struggle with the process of applying for life insurance and therefore, put off getting a quote. This is understandable as you will need to discuss the details of your condition with a person you do not know.
However, it is important to understand that insurers are very familiar with assessing applications for people with a mental health condition.
Once your life insurance is in place, you can have peace of mind that your family are financially protected if you are no longer around to provide.
How to get the cheapest premiums
If you suffer from a mental health condition such as depression or anxiety, it is really important to compare multiple quotes before securing cover.
Every insurer will assess your application differently and therefore premiums will vary in cost, so shopping around will ensure you can get the best available price.
You can do the research yourself, use a comparison website or enlist the help of a specialist FCA-regulated broker.
Whichever method you choose to compare quotes, rest assured the vast majority of those suffering from a mental health condition can in fact secure affordable life insurance.
In fact, the most influential factor affecting the price of premiums is likely to be your age – so why not seize the day and secure your loved ones financial future?
Sources:
This article was written by a freelance writer.
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