Will you be covered for life insurance if you have a mental health illness?

Last updated on November 25th, 2021 at 03:02 pm by Bill Tsouvalas

Although there are still some misconceptions that surround mental illness, it is very common in Australia. Statistics reveal that 1 in 5 Australians aged 16 – 85 will experience some form of mental illness during the course of their life. The question is will you be able to get life insurance after being diagnosed with a mental illness.

The short of it is that you can get adequate life insurance coverage even if you have a mental illness. The long end of it is that your insurer will need some medical information.

What is the Australian makeup when it comes to mental illness

There are various forms of mental illnesses that a person can suffer from such as depression, anxiety and substance disorder which doesn’t pop up once but is a reoccurring problem in someone’s life. Some people can develop two forms of mental illnesses at the same time which can hinder their productivity in life. Almost 45% of Australians will experience a mental illness in their lifetime.

How will this affect your life insurance

Life insurance is there to make sure that your loved ones continue their lifestyle even when you are no longer around. Your insurer will need to assess your medical history to assess your eligibility and that you get the most suitable cover.

Your application will be initially assessed at standard rates without loadings or exclusion if you are still undergoing treatment for any mental illness. Insurers look at the history of the illness in your family and other past medical conditions to determine the term of your cover. This is a process that everyone must undergo.

It’s not a one glove fits all process, meaning that insurers evaluate applications on a case-by-case bases. Therefore, premiums will differ depending on the history and severity of your case.

Discrimination is a real thing but shouldn’t deter you from applying

Despite the improvement of information and knowledge surrounding mental health issues, applicants could still face discrimination from insurers. Studies have shown that people who suffer from depression could have a hard time when applying due to some insurers claiming that it is something that can be faked.

A survey released by Mental Health Council of Australia revealed that out of 500 respondents suffering from depression, 45% were denied income protection and 35% did not get life insurance cover. There have been various moves and coalitions formed between health councils and insurance companies to help better the understanding of mental illness.

These are aimed at improving the underwriting and claim process for people who suffer mental health illnesses.

If your application has been denied or has not been given a standard rating during the underwriting process you have the right to have the decision explained in writing. It is important that you shop around and compare so that you can move onto another company that will get your need for life insurance.

You can get life insurance no matter what mental illness you have, so long as you follow the doctor’s orders by complying with the medication that’s given there shouldn’t be a reason why you can’t be covered.