A couple of years ago, the South African Stress and Health study – initiated by the World Health Organisation – revealed that around 16.5% of SA’s adult population suffered from some form of mental disorder.

The most common disorders included alcohol abuse, depression and agoraphobia (fear of leaving your house).

More recently, in 2018, the Sunday Times reported that over 17 million South Africans were suffering from depression, substance abuse, anxiety, bipolar disorder and schizophrenia. These numbers have been widely disputed, but it doesn’t negate the fact that depression is a very real problem, one that has slowly grown and grown over the years due to a variety of factors and influences, such as the economic or social climate.

Though often thought of as a psychological disorder, depression can also impact your physical health. Some of the tell-tale signs include fluctuating weight, insomnia, lack of focus, weakened immune system and high blood pressure. Coupled with elevated levels of stress, suicidal thoughts, feelings of despair and worthlessness, excessive use of medication and even a pattern of job loss, and you’ve got life insurance companies very, very worried.

Because depression is so prevalent in the modern age, we thought we’d take a look at what kind of implications this disorder would have on your life insurance. 

Of course, insurers are known to scrutinize your history in order to establish the levels of risk involved, but would they turn a client away if the risk was too high? Would they charge higher premiums due to the risks involved?

We spoke to some of the bigger long-term insurance companies to find out.

One of the biggest concerns involved with insuring a client suffering from depression is the possibility of suicide. As stated above, though, there are a number of other medical issues that could arise, all of which could result in costly treatments or even premature death.

There are a number of damaging lifestyle habits that can accompany depression, such as lack of exercise, substance abuse, a bad diet, lack of sleep and an aversion to social interaction. Any number of these could be considered problems in themselves, but when combined, they create a particularly volatile hazard to insurers.

As a result, it’s commonly assumed that life insurance companies will charge greater premiums in order to cover the risks involved. They will look at the frequency of depressive bouts in your past, whether or not you have ever attempted to commit suicide, any medication you may be using, etc.

As it is with any other threatening illness, the insurer looks at how effectively the condition is being controlled. The better the control and the better your overall health, the lower your premiums will be.

It certainly doesn’t hurt to take action before applying for insurance. This could include seeking psychological treatment, following a healthy diet, exercising, getting the proper amount of sleep and getting checked out by a doctor as frequently as possible.

There are many long-term insurers in South Africa, and it’s true that some of them may choose to avoid depression as a risk factor in its entirety. Fortunately enough, others have recognised the problem for what it is and have taken a positive stance. 

We asked a few of them some difficult questions, and this is what we learnt…

In order to collect a client’s medical information and history, insurers ask a number of questions via a document called the underwriting annexure. Upon application for a life insurance policy, the client is expected to disclose whether or not they have a history with any mental disorders, such as depression.

If these questions indicate that the client has a history, the insurer may then issue the client and their doctor with further medical questionnaires in order to better ascertain exactly what is being dealt with. With the client’s consent, the insurer may also request clinical history reports from the treating doctor.

In pretty much all cases of life insurance, there is a two-year suicide exclusion in place. This means that should the client commit suicide within that two-year period, the policy will not pay out to the beneficiaries.

However, the most important thing the insurer looks at is the severity of the condition. After the severity is assessed, premiums may or may not be adjusted and depending on the severity of the condition, this suicide exclusion could also be increased by a number of years. Should the client pass away as a result of suicide after the stated period has passed, the insurer will generally honour the agreement and pay for the claim.

Of course, there is always a possibility that a client’s application will be rejected at the onset, and this is based on a variety of factors. Seeking professional medical attention will place the client in the most favourable position to be assessed.

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