Depression and the implications for your insurance cover

Hayley Taylor from Hollard Life.

You’ve probably heard that life insurance is cheaper and easier to get the healthier you are. We tend to think of ‘healthy’ as relating to our physical health, but did you know that your mental health can also play a role in the cost of your insurance?

Depression is one of the most commonly diagnosed mental health disorders – in fact as many as one in six South Africans suffer from anxiety or depression according to the South African Depression and Anxiety Group (SADAG) but only one third of those will get treatment. This is in part because a lot of people think of depression a simple case of the ‘blues’. But it’s a serious illness that can interfere with your ability to function in your normal daily life so it’s essential to seek medical help and support.

Can I still get life cover if I’ve been diagnosed with depression?

An insurance company will definitely want to know if you’ve been diagnosed with depression “but that doesn’t mean that you can’t get cover,” explains Hayley Taylor from Hollard Life. “It’s very important to tell your financial advisor if you are or have been previously diagnosed with depression”. When an insurer receives your application form they use the information you provide to decide whether to offer you cover, how much cover to offer you and how much your monthly premium will be. It’s essential that you tell your insurer everything about your depression from the very beginning because giving incorrect or incomplete information when you apply could make it difficult for you when you try to claim.

How will my depression affect my life cover?

Insurers will consider the type of depression the type of treatment that you’ve had and how well you’ve managed it in the past. They will want to know the following:

• Date of diagnosis
• Method of treatment
• Past methods of treatment
• Doctor’s details
• Symptoms and dates of last symptoms
• Details of any previous hospitalisations
• Details of any suicide attempts
• Specifics of time taken off work as a result of the condition

Based on the information that you provide about your depression, an insurer may choose to charge you a higher premium. They may also apply what is called a ‘permanent suicide exclusion’, which means that they won’t pay out if you take your own life. An insurer may choose to apply a ‘depression exclusion’ on disability and income benefits because depression and associated conditions like chronic fatigue and fibromyalgia (a disorder that causes muscle pain and fatigue) can leave you unable to work for periods of time.

Some depression is temporary and happens as a reaction to a particular situation like the death of a loved one or having a baby (post-natal depression). This is called reactive depression and Hollard Life wouldn’t charge you a higher premium for this kind of depression as long as it has been successfully treated.