Life Insurance Underwriting Strategies for Applicants with Mood Disorders
Anxiety, depression, and related mood disorders are extremely common; most people will have related experiences from time to time. From a life insurance underwriting perspective, the greatest concern lies with a new diagnosis, moderate & severe bouts, and chronic disorders. In preunderwriting a risk, we need to differentiate between mild, temporary, situational disturbances that resolve within weeks or a couple of months from those that are moderate, severe, and chronic.
Of greatest concern to insurance company medical directors are newly diagnosed moderate or severe presentations of a mood disorder; it is often very difficult to get a good feel for a long-term prognosis. Morbidity and mortality risks come from significant self-medication via alcohol & drugs, accidents, suicide in acute settings, and cardiovascular disease for chronic sufferers.
Mood disorders include various forms of anxiety, depression, bipolar disorders, panic attacks, agoraphobia, general phobias, obsessive-compulsive disorders (OCD), post-traumatic stress disorders (PTSD). Treatments include therapy, medications, (recent) off-label use of psychedelics, electroconvulsive therapy, and transcranial magnetic stimulation – often a combination of some of the above. In extreme cases unresponsive to other treatments, invasive surgical intervention with deep brain stimulation and ablation may be attempted.
Temporary bouts of a mood disorder that can be explained by situational circumstances (job loss, divorce, illness, loss of a loved one) tend not to cause underwriting issues. It’s important to make the underwriter aware of the unique temporary nature of the circumstances that have led to an apparent transient mood disorder.
On the other extreme, the recent diagnosis of severe mood disorder, accompanied by significant self-medication with alcohol and/or drugs, recent suicidal thoughts or attempts, hospitalizations within the past couple of years, usually lead to postponements until the condition comes under better control for at least another couple of years.
Most applicants fall between these two extremes, and that is where you, the field underwriter, can make a big difference for your client. Help us paint the most positive vision of the applicant in the underwriter’s mind. Does the applicant seek regular medical advice to manage the condition? Therapy? Is the condition stable? Is it getting better? Does the applicant have a strong support network via family, stable job, church, participation in clubs or social events? Help us develop positive variables that are not typically asked on a formal application. These “soft details” give us the best chance of finding that sympathetic ear, as we negotiate the fact pattern with insurers that specialize in underwriting mood disorders.
Insurer Selection is Key:
Insurance companies have a very difficult time pricing the unknown. For mood disorders, there are often lots of unknowns, and much of what is known, is subject to interpretation. Conservative insurers tend to pass on these risks, or offer pricing that is unacceptable to an applicant.
Given the prevalence of mood disorders, several highly rated brand name insurers have developed specialized expertise in underwriting one or more forms of mood disorders. One insurer is particularly good with some forms of bipolar disorder; another is better at major depression. Recent onset of PTSD can be difficult everywhere, but we can often come up with at least a couple of acceptable offers.
Given the above, there is no one best company for all applicants with a mood disorder. Therefore, it is best to gather a few key facts in advance of an application. We can then use that information to obtain a preliminary underwriting assessment from several insurers, identify the best carrier for the risk, and provide you with approximate product pricing. This underwriting strategy makes it much easier for the advisor and applicant, relative to applying somewhere, and then having to move the case to another insurer. The questions below can be used to obtain relevant underwriting facts in advance of a formal application.
Pre-Formal Underwriting Questions:
- What is your name:
- What is your date of birth:
- What is your gender? F ____ M ____
- When were you first diagnosed with a mood disorder?
- Was there a specific causative experience (job loss, divorce, illness, loss of a loved one)?
- If there is a specific trigger (causative event) for the experience, is it still present, or has it been resolved?
- What symptoms did you experience that led to the diagnosis?
- Current symptoms, if different:
- If the mood disorder comes and goes, number of bouts since onset:
- Have you ever been (or are you currently) on disability leave of absence from work or school? Describe:
- How often do you see a therapist?
- How frequently do you see your regular medical doctor or psychiatrist?
- List all medications prescribed to treat the mood disorder:
- Beyond therapy and medications, any other types of treatments (e.g., Ketamine, ECT, TMS…):
- Is the disorder stable, getting worse, or getting better?
- Date of last hospitalization for the mood disorder, if ever:
- Date of most recent documented suicidal thoughts: ______ Attempts: ______
- Describe alcohol use pattern over the past 12 months:
- Outline any drug use, including marijuana, over the past 12 months:
- List major driving violations in the past 7 years, especially reckless driving, DUIs, accidents:
- Build (height/weight): _______ Change in past 12 months: _________
- Describe all favorable variables (e.g. stable job, supporting family, church involvement, hobbies, social network and activities):
- Are there any other medical conditions for which you are being treated? If so, describe:
- List any prescription medications you are taking & what you are taking them for:
- Describe any regular exercise: _________
- Do you use any form of tobacco? If so, describe type and frequency of usage: