Protection  

Protection has a role to play in raising mental health awareness

Protection has a role to play in raising mental health awareness

One in four of us will suffer a mental health problem at some point in our lives, with the Organisation for Economic Co-operation and Development estimating that this costs the UK £70bn a year in lost productivity, benefit payments and healthcare expenditure. 

The size of the problem means it is high up on the government agenda. In January, prime minister Theresa May announced a package of measures to improve mental health support. Aimed at creating parity for mental and physical health, these include greater use of digital mental health services, mental health first aid training for secondary schools, and a review looking at how employers can improve mental health support in the workplace. 

Insurance provision

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Insurers also have a role to play, enabling individuals with mental health conditions to access protection policies such as life insurance, critical illness and income protection. 

Rhoda Lawrence, insurance specialist at Life Insurance Help, which helps people who have health conditions or dangerous pastimes to find insurance, explains: “Insurers assess applications on a case-by-case basis, so it will depend on the nature of the mental health condition and how it affects the risk.”

As an example, although any history of mental health must be disclosed in the application, where an incidence is deemed to be ‘reactive’ it will usually be overlooked. This could be the case where a spell of depression or anxiety is linked to a particularly difficult period in someone’s life: for example, bereavement, the breakdown of a marriage or redundancy, with most people making a full recovery once the stressful time has passed. 

Life lessons

An insurers approach will depend on the type of product. Exclusions are unusual on life insurance, with insurers preferring to increase the premium rather than risk confusion when the policyholder’s family comes to make a claim. 

“We look for red flags, such as hospital admissions, attempted suicides, or coexisting issues such as alcohol or drug abuse, and may also request a GP report if we need further information,” says Darren Lee, director of underwriting and claims at Vitality Life. 

“Where there is an increased risk, we can load the premium, but if the risk is too high we may decline cover.” 

Life insurance will pay out in the event of a suicide, but to prevent people taking out cover when they are feeling suicidal, insurers include a clause that requires policies to be in force for at least 12 months before such a claim is accepted. 

Mental health conditions present much less of an issue for critical illness insurance underwriting. Although associated issues such as alcohol addiction or obesity may push up the risk of some conditions, Stephen Crosbie, protection director at Aegon, says mental health does not affect the incidence of serious illnesses such as cancer or stroke. 

Income cover

Where an individual’s mental health will have much more of a bearing is income protection. Mental health conditions are one of the most common claims, with insurers reporting that they account for as much as one third of all of those they pay.