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Key Takeaways
Mental health history must be disclosed when applying for term insurance in India, as non-disclosure can lead to claim rejection.
Eligibility depends on the severity, treatment history, and stability of the mental health condition, and not all cases lead to rejection.
Insurers like Canara HSBC Life Insurance take a more inclusive and case-by-case approach toward applicants with past or ongoing mental health issues.
Providing complete medical documentation and demonstrating long-term stability can improve your chances of approval.
India's insurance sector is slowly evolving, but applicants must still be proactive, transparent, and well-prepared when applying with a mental health history.
The Rise in Mental Health Awareness
The importance of mental health is becoming more widely recognised as more individuals talk openly about mental health issues like bipolar disorder, depression, and anxiety. This has also been recognised by the Insurance Regulatory and Development Authority of India (IRDAI). Based on the Mental Healthcare Act of 2017, it has instructed insurers to treat mental disorders on an equal basis with physical illnesses in recent years.
This regulatory move marks a significant shift towards inclusivity in insurance practices. However, while mental health conditions must legally be treated on par with physical illnesses, insurers often still evaluate them cautiously during underwriting. Factors such as the severity of the condition, treatment stability, and any history of hospitalisation can influence the approval and pricing of term plans.
However, despite regulatory direction, practical application can differ between insurers. When applying for a term life policy, your medical history plays a key role, and mental health conditions can impact both premium rates and eligibility.
How Does Mental Health History Affect Term Plan Eligibility?
Insurance is based on risk assessment. An insurer looks at several variables while evaluating an application for a term insurance plan, including age, occupation, family medical history, lifestyle, and pre-existing health issues. More and more consideration is given to mental health concerns in this assessment.
Here are some ways a mental health history may influence your application. Insurance companies aim to assess the overall risk an applicant presents before issuing a policy. A history of mental health challenges can signal potential future complications, prompting insurers to take additional precautions. Therefore, complete honesty during the application process is crucial, as non-disclosure can lead to claim rejection later on.
Disclosure Requirement: When applying for a term plan, you must disclose your complete medical history, including any past or current treatment for mental health conditions.
Medical Reports and Questionnaires: If you disclose mental health issues, the insurer may ask for additional documents like psychiatric evaluations, therapy or counselling history, or hospitalisation records.
Premium Adjustments: Depending on the severity and type of condition, you may be charged a higher premium. Conditions that require ongoing treatment or have a history of hospitalisation are often viewed as higher risk.
Policy Approval or Rejection: In some cases, insurers may defer or deny applications based on the nature of the condition, especially if it includes suicidal tendencies, multiple hospitalisations, or inability to maintain employment.
Waiting Periods and Exclusions: Some insurers may approve your term life policy but impose a waiting period for death related to mental illness, or they may include specific exclusions in the policy.
Did You Know?
Failing to disclose history of mental illness when buying a term plan could lead to a claim rejection later, even if death is unrelated to mental health.
Although mental health is now being recognised under the same umbrella as physical health, the industry is still evolving. Some insurance providers are adopting more inclusive underwriting processes. They are beginning to understand that not all mental health conditions pose the same risk and that with proper treatment, individuals can lead long, healthy lives.
For example, someone who has managed anxiety or mild depression with counselling or occasional medication may be seen differently than someone who has had multiple psychiatric hospitalisations. Transparency, regular treatment, and medical documentation can all work in your favour.
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What Can You Do If You Have a Mental Health History?
If you're concerned about how your mental health may impact your ability to get a term insurance plan, here are a few proactive steps you can take:
Be Honest and Transparent: Disclose your complete medical history when applying. This includes medication, therapy, hospitalisation, or even past episodes of depression or anxiety.
Provide Supporting Documents: If you have been under treatment and are stable, providing your doctor’s report and therapy records can support your case. It helps insurers understand that your condition is under control.
Consult an Insurance Advisor: Professionals can help you choose the right insurer that offers mental health-inclusive policies and guide you through the application process.
Compare Multiple Insurers: Some insurers may have more flexible underwriting policies. For example, Canara HSBC Life Insurance is known for its comprehensive and customer-friendly approach. Its term life policy options cater to a wide range of applicants, including those with disclosed medical histories.
Choosing the Right Insurer When You Have a Mental Health History
Not all insurers are the same when it comes to underwriting policies for individuals with a history of mental health conditions. The way an insurer views your application can vary significantly based on their internal risk evaluation models, their medical panel’s opinion, and even their commitment to inclusive practices.
So, how do you choose the right one?
Key Things to Look For:
Transparent Underwriting Process: Choose an insurer that clearly outlines its underwriting approach and is willing to explain how mental health factors into eligibility and premium calculations.
Supportive Documentation Requirements: Look for providers that accept detailed medical reports, psychiatrist evaluations, or therapy progress notes to assess your condition fairly, rather than making decisions based solely on diagnosis.
Customisation and Flexibility: Opt for insurers that offer flexible features like riders, return of premium options, and variable coverage terms. These features make the term insurance plan more adaptable to your life situation.
Guidance Throughout the Application: Having dedicated assistance during the application process can make a huge difference. Providers like Canara HSBC Life Insurance are known for offering customer-centric support, helping applicants navigate medical disclosures and documentation with clarity and empathy.
Reputation and Claim Settlement Ratio: Always review the insurer’s claim settlement record. A high ratio reflects credibility and reliability, especially important when you’re disclosing sensitive medical history.
How Mental Health Treatment History Is Viewed?
Not all conditions are weighted equally. Here’s a general guide to how insurers may treat mental health issues:
Condition
Impact on Term Plan Eligibility
Mild Anxiety/Depression
Usually accepted with a standard or slightly higher premium
Bipolar Disorder
May require detailed history, possible premium loading or exclusions
Schizophrenia
Higher risk, likely rejection, or special terms
History of Suicide Attempts
May lead to rejection or a lengthy waiting period
Counselling with No Medication
Often considered low risk
Importance of Mental Health Riders
Some insurers offer riders for critical illnesses that now include mental health-related conditions. While these may not be standard in every term insurance plan, they are gaining ground. These riders provide added protection and financial support if you're diagnosed with a listed mental health disorder during the policy term.
Before selecting a term life policy, enquire if such riders are available and whether they are worth including based on your history.
Final Thoughts
Mental health is an integral part of overall well-being. As awareness and regulations improve, so will access to financial products like term insurance plans for individuals with mental health histories. While challenges still exist, the tide is turning.
If you or someone you know is worried about how mental health might impact term insurance eligibility, remember:
Transparency is key
Each insurer evaluates cases individually
Mental health treatment shouldn’t prevent you from securing a safety net for your family
Securing a term life policy is one of the most thoughtful decisions you can make for your loved ones. With the right information and a proactive approach, even applicants with a history of mental health issues can get the protection they deserve.
Glossary
Underwriting: The process insurers use to assess the risk of insuring a person based on health, lifestyle, and medical history.
Premium Loading: An additional premium charge is added due to higher risk factors, like mental health history.
Material Non-Disclosure: Failing to disclose important info, like a pre-existing mental health condition, can lead to claim rejection.
Riders: Optional add-ons to policies for extra coverage, such as for critical illness or accidents.
Claim Settlement Ratio: Percentage of claims an insurer successfully settles, reflecting their reliability
FAQs
Yes, it’s possible, but the insurer may assess your condition and require additional documentation.
Non-disclosure of mental health history may lead to claim rejection or policy cancellation later on.
Yes, some insurers, like Canara HSBC Life Insurance, may offer more inclusive policies if you fully disclose your condition.
Some insurers may offer riders for critical illnesses, including mental health conditions, depending on the policy.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
