Life insurance companies are increasingly denying claims by arguing that the insured failed to disclose past mental health treatment. Families are shocked because the death had nothing to do with mental health, and the insured often believed the treatment was minor, private, or irrelevant. Insurers use this tactic to rescind policies after death by claiming the insured misrepresented their medical history.
These denials are painful, invasive, and often legally improper. Mental health treatment is common, yet insurers treat it as a red flag even when the application questions were vague or the treatment occurred years before the policy was issued.
This guide explains how insurers use mental health treatment as a basis for denial, why these denials frequently fail, and how beneficiaries can challenge them.
Why Insurers Focus on Mental Health Treatment
Insurers view mental health treatment as a potential indicator of increased mortality risk. They often rely on outdated assumptions and broad underwriting rules that do not reflect modern medical understanding. When a claim is filed, insurers search for any reference to:
• Therapy or counseling • Antidepressants or anti anxiety medications • Psychiatric evaluations • Hospitalizations for emotional distress • Treatment for trauma or grief • Medication prescribed by a primary care doctor
If they find anything that was not disclosed on the application, they may deny the claim even when the treatment was routine or unrelated to the cause of death.
How Insurers Build These Denials
Insurers typically argue that the insured:
• Failed to disclose therapy sessions • Failed to disclose medication for depression or anxiety • Failed to disclose a mental health diagnosis • Failed to disclose hospitalization for emotional or psychological reasons • Understated the severity of past symptoms • Misrepresented their mental health history
These denials often rely on medical records that the insured never saw or did not remember. Insurers frequently take notes out of context or rely on a single line in a doctor’s chart to claim nondisclosure.
Why These Denials Are Often Wrong
A denial based on nondisclosure of mental health treatment is not automatically valid. Insurers must prove that the omission was intentional, material, and would have changed the underwriting decision. Most cannot meet that burden.
Here are the most common reasons these denials fail.
The application questions were vague or confusing
Many applications ask broad questions like:
• Have you ever been treated for a mental or emotional condition • Have you ever taken medication for stress or anxiety • Have you ever consulted a counselor
These questions are so general that reasonable people interpret them differently. Courts often rule that unclear questions must be interpreted in favor of the insured.
The insured did not know about the diagnosis
Doctors often document symptoms or impressions that were never communicated to the patient. Insurers cannot deny a claim based on information the insured never knew.
The treatment was minor or unrelated
Short term counseling, grief therapy, or low dose medication for situational stress rarely affects underwriting decisions. Insurers often exaggerate the significance of these treatments.
The cause of death had nothing to do with mental health
If the insured died from cancer, heart disease, an accident, or any unrelated cause, the insurer must prove that the alleged nondisclosure was material. This is a high legal standard.
The insurer would have issued the policy anyway
Underwriting guidelines often show that the insurer would have approved the policy even with full disclosure. When this is true, the denial cannot stand.
How Beneficiaries Can Challenge These Denials
These denials are highly challengeable because they rely on assumptions, vague application questions, and incomplete medical records.
Beneficiaries should take the following steps.
Request the complete claim file
The claim file reveals what the insurer relied on and what evidence it ignored.
Obtain the full medical records
Insurers often rely on partial records or misinterpret notes. The complete records usually tell a different story.
Compare the alleged nondisclosure to the application questions
If the insurer never asked about the specific treatment, the insured could not have misrepresented it.
Review underwriting guidelines
If the insurer would have issued the policy even with full disclosure, the denial is invalid.
Challenge the accuracy of the medical notes
Mental health notes are often shorthand, incomplete, or misinterpreted by insurers.
When the Denial Becomes Bad Faith
A denial may cross into bad faith when the insurer:
• Misquotes or misinterprets medical records • Ignores evidence that contradicts its position • Applies outdated mental health assumptions • Uses vague application questions to justify rescission • Delays the investigation while searching for mental health history
These behaviors can support a claim for additional damages.
Why Families Should Not Give Up
Mental health treatment is common, normal, and often unrelated to mortality risk. Insurers use it as a convenient excuse to deny claims, but these denials frequently collapse under legal scrutiny. Families should not accept a denial based on nondisclosure of mental health treatment without a thorough review.