We’ve talked a lot about how the risk of mild or past mood disorders rarely get a fair shake from life insurance underwriters. Recently a few of our best companies when it comes to mood disorders from depression and anxiety to bipolar disorder, have changed their view on the actual mortality risk and while companies are free to change their minds and go where they believe they need to, we take exception to the sweeping of an entire category under the rug.
Before we launch into our argument about this change let’s preface it by saying that not all companies have agreed with or joined this shift, so there are still companies that believe that well controlled mild to moderate mood disorders and past treatment for mood disorders deserve individual attention and good approvals.
So let’s talk about the risk assumptions that are floating around some underwriting lunchrooms and causing large shifts in underwriting outcomes. As near as we’ve been able to ascertain from talking to underwriters and actuaries at the companies that seem to have changed direction, there is concern over the number of claims related to suicide. One actuary actually claimed that 10% of their claims were suicide related which at best was missing a couple of decimal points and at worst means that company is actually listening to an actuary throwing out bogus information. It’s worrisome because that came from a company that has shown the largest shift in their mood disorder underwriting.
Are suicide rates up? Yes they are. While most of the statistics kind of cover the decade from 1999-2010, what they show is a not so dramatic increase overall, but a significant increase in the baby boomer age group. Most often cited reasons for this increase are the economy and the position it’s put so many boomers in of having to deal with their own financial challenges and take on the care of parents who are living longer and often children who are coming back home or are at least are asking for help more often than previous generations. It’s a stressful time.
We’re sure this is what underwriters are looking at and leaping to the assumption that those most at risk of suicide are those being treated for mood disorders. But our take is that this is not unlike companies that don’t want to underwrite children, say, with type 1 diabetes. They really don’t know what the mortality risk is, but the fact on the ground is that children that die from type 1 diabetes are almost always diagnosed on their autopsy. Deaths due occur after diagnosis, but monitoring, treatment and control are in place and the danger is far less than undiagnosed.
We would assert that this is also true of mood disorders. In those rising suicide rates there is no actuarial risk assessment that shows that those being treated or that were treated for mood disorders are at a higher risk of suicide. It seems that the larger risk is those who have never dealt with any kind of mood destabilization and are suddenly or slowly overcome by depression and anxiety. They die undiagnosed and untreated. Life in 2013 can be overwhelming and companies that turn away from underwriting individuals based on their facts and do bundle underwriting are probably taking out their underwriting on the wrong group of applicants.
If you feel like you have been treated unfairly in mood disorder life insurance underwriting, don’t take it as the final answer. Things are shifting, but the sensible companies are still using common sense. Call or email us. We can help.
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