I doubt there are any of us who have not been through some period of situational depression and while depression can come in many colors and sizes, I think it is important to define it and talk about it in the context of life insurance.
Common causes of situational depression are the loss of a loved one, marriage problems, illness, problems at work and for some just the realization that you are getting older. The thing that distinguishes situational depression from chronic depression or severe depression is 1. the cause and 2. the length of problem. Generally with situational depression, getting help and time combine to make the length of the depression issue relatively short. Depending on the cause, it might last from just a few months to generally not more than a few years.
Underwriters are generally compassionate in this area as long as the depression is not severe enough to require hospitalization or impacts a person’s ability to function, such as lost time from work while being treated. Many companies will offer as good as preferred and occasionally preferred plus rates for well controlled situational depression.
Chronic depression differs in that many times there is no discernible cause and generally it is a problem for a longer time, if not for the rest of a person’s life. While a situation or event may have initially triggered the need for treatment, the never ending nature of the problem requires a different view from an underwriter. Again, if well controlled (no hospitalization or lost time), underwriters will likely see their way to better than standard rates and occasionally as good as preferred, although preferred would definitely be the exception.
Severe depression is usually a bit of a mine field for underwriters. The fact that it is labeled severe generally means that it is or has impacted the stability of life and often requires stronger medications or multiple medications. Severe depression often impacts a person’s job performance or ability to even hold a job. It may mean occasional hospitalization. It can include suicidal thoughts or even attempts.
In the absence of job impact, hospitalization or any suicidal ideations, underwriters will most often look at severe depression in the standard to slightly sub standard rate classes. If the depression has taken control of your life, in all likelihood the result will be a declined application for life insurance.
Bottom line. A good independent agent with access to all of the top companies is imperative when shopping for life insurance with any level of treated depression. This is not the time to run down to your auto insurance agent.