EX­CLUD­ING DE­PRES­SION

How life in­sur­ance cov­ers this men­tal dis­or­der

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IT'S a com­mon myth that peo­ple who suf­fer from de­pres­sion can’t get life cover. They can, and their pre­mi­ums aren’t nec­es­sar­ily higher be­cause of their ill­ness.

Long-term in­sur­ance prod­ucts for those suf­fer­ing from de­pres­sion tend to make use ex­clu­sions in­stead.

We ex­plain what they are and how they’re ap­plied.

BE­FORE YOU SIGN UP

When you take out a pol­icy you’ll be asked on the ap­pli­ca­tion form if you suf­fer or have suf­fered from de­pre­ssion, anx­i­ety or stress, or if you’ve ex­pe­ri­enced prob­lems with your ner­vous sys­tem or men­tal health.

De­pres­sion presents in a va­ri­ety of ways and the in­sur­ance com­pany has to de­ter­mine the sever­ity of your con­di­tion. By law you’re ob­li­gated to dis­close such a con­di­tion to the in­surer be­cause it can in­flu­ence the risk anal­y­sis and con­di­tions of your cover, says Henk Mein­t­jes of Lib­erty Life.

In­sur­ers want to know:

▶ What your symp­toms are ▶ What treat­ment you’re get­ting or have had ▶ Your doc­tor’s de­tails. If ap­pli­ca­ble, you might also be asked for de­tails re­gard­ing: ▶ Hos­pi­tal­i­sa­tion ▶ In­ci­dents when you weren’t able to work be­cause of the con­di­tion ▶ Any sui­cide at­tempts.

EX­CLU­SIONS

Based on your an­swers the in­surer then de­ter­mines how big the risk is that, for ex­am­ple, you might be­come un­able to work due to de­pres­sion.

Dave Ruiter of Venn-Sure Con­sult­ing says when de­pres­sion is iden­ti­fied as a risk, most in­sur­ers make it an ex­clu­sion and don’t raise pre­mi­ums be­cause of it.

Ex­clu­sions are in­ci­dents not cov­ered by your pol­icy. They’re usu­ally for con­di­tions that are al­ready present and could be­come a ma­jor risk for fu­ture cover.

DIS­ABIL­ITY COVER

De­pres­sion is usu­ally ex­cluded in dis­abil­ity cover. Dave ex­plains there are two types of dis­abil­ity cover: sin­gle-amount dis­abil­ity and in­come pro­tec­tion.

With sin­gle-amount dis­abil­ity cover a cash amount is paid out if you be­come per­ma­nently dis­abled and there­fore un­able to work. In­come-pro­tec­tion cover, on the other hand, pays out a monthly in­come if you be­came tem­po­rar­ily or per­ma­nently dis­abled.

De­pres­sion can ren­der a per­son un­able to work for long pe­ri­ods, and it’s usu­ally an ex­clu­sion on both types of poli­cies.

This means you can claim dis­abil­ity cover for any other rea­son, for ex­am­ple if you be­come paral­ysed in an ac­ci­dent and can’t do your work be­cause of that, but not if you can’t work be­cause of de­pres­sion.

IT CAN BE RE­VIEWED

If there’s an ex­clu­sion on your pol­icy due to de­pres­sion it can be re­viewed un­der cer­tain cir­cum­stances, for in­stance if the de­pres­sion was of a tem­po­rary na­ture or a re­ac­tion to a par­tic­u­lar sit­u­a­tion.

For ex­am­ple, if you were in a stress­ful work sit­u­a­tion, if some­one close to you died or if you suf­fered from post­na­tal de­pres­sion. In other words, a sce­nario where you be­came de­pressed and re­ceived treat­ment but it wasn’t an on­go­ing con­di­tion.

If you ap­ply for a pol­icy dur­ing this time, the in­surer could make the de­pres­sion an ex­clu­sion. How long the ex­clu­sion con­tin­ues de­pends on the pol­i­cy­holder’s con­di­tion or the in­surer’s rules.

Some­times the ex­clu­sion clause states that it’s sub­ject to re­view in a year or two, but when there’s no such stip­u­la­tion you can app­roach the in­surer for a re­view at any time and the ex­clu­sion could be re­moved.

AL­TER­NA­TIVE PLANS

If one in­surer ex­cluded de­pres­sion it will prob­a­bly also be ex­cluded by other in­sur­ers.

If you want to fi­nan­cially plan for times when you might not be able to work due to de­pres­sion, con­sult a fi­nan­cial ad­viser. They can help you come up with a scheme like putting to­gether a sav­ings plan so you can cover your ex­penses if you’re not able to work.

You might also be able to take sick leave at work for short pe­ri­ods.

LIFE COVER

De­pres­sion isn’t usu­ally an ex­clu­sion on life cover. It’s ex­cluded prob­a­bly only if a per­son has pre­vi­ously se­ri­ously in­jured them­selves or at­tempted sui­cide due to de­pres­sion.

When there’s too big a risk that the suf­ferer might com­mit sui­cide, life cover might be re­fused. Sui­cide is ex­cluded for two years on life poli­cies any­way. This means if the pol­i­cy­holder dies as a re­sult of sui­cide within two years of tak­ing out their life pol­icy, their ben­e­fi­cia­ries won’t re­ceive a pay­out.

IM­POR­TANT

When ap­ply­ing for cover you must be to­tally hon­est. If you’ve suf­fered or suf­fer from de­pres­sion, de­clare it.

If the in­surer in­ves­ti­gates your med­i­cal his­tory and dis­cov­ers you haven’t noted it, it’s re­garded as nondis­clo­sure.

This means the in­surer could refuse to pay out based on nondis­clo­sure, even if you’re claim­ing for some­thing com­pletely dif­fer­ent.

Dave says in­sur­ance com­pa­nies pay out the vast ma­jor­ity of claims. When there are de­lays it’s of­ten be­cause the clai­mant’s med­i­cal his­tory was in­vesti­gated and it was found that full dis­clo­sure about the per­son’s med­i­cal back­ground wasn’t made.

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