Depression and insurance underwriting

This is ordinary underwriting territory. New Zealand insurers see a recorded history of depression on a very large number of applications, and they have a settled way of assessing it. That way involves a detailed questionnaire, a GP report, and a rating table that maps duration, treatment and recency to an outcome.

The outcome most people get is that life cover goes through at standard rates and income protection is offered with an exclusion covering mental health conditions. That is a common result. It is not a decline, it is not a comment about the person, and the rest of the income protection policy remains fully effective for every other cause of disability.

The detail matters here more than in almost any other disclosure, because a vague answer leaves the underwriter to assume the broader version.

• When the episode began and when it resolved.
• Whether a formal diagnosis was made, and by whom.
• What treatment was given, including counselling and medication.
• Whether medication continues, and if not, the date it stopped.
• Whether there has been more than one episode, and when.
• Whether any time off work was taken, and how much.
• Whether there were any hospital admissions.

Evidence commonly requested

• A GP report covering the consultations, the diagnosis and the prescribing record.
• A specialist or counsellor report in some cases.

What underwriters look at over time is a single episode rather than several, a clear end point, a documented period since medication stopped, no time off work, and no recurrence in the record. Those are the factors that separate a narrow exclusion from a broad one, or an exclusion from standard terms. Where an exclusion has been applied and several years have passed with nothing recorded, a review request is reasonable — though insurers grant these less readily than they reduce loadings.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• That an exclusion on income protection is a common outcome and not a reason to give up on cover.
• Whether the exclusion covers a named condition or all mental health and stress-related claims.
• That the prescribing record in your GP notes will show medication whether or not you mention it.
• That a recent episode or a recent medication change often produces a deferral rather than an exclusion.
• That different insurers word mental health exclusions very differently.

Every New Zealand insurer writes applications with a mental health history to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Insurer appetite for a depression history varies widely and changes as reinsurance treaties are revised.
• An adviser can pre-assess anonymously and compare the wording each insurer would apply.
• A clear written chronology supplied at application often produces a narrower exclusion than a bare disclosure.
• After a long clear period, an adviser can put a review request together properly.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.