Protection 

Getting right blend of cover for mental health issues

This article is part of
Guide to mental health protection

Getting right blend of cover for mental health issues

Mental health issues are one of the most commonly cited reasons for claims.

According to latest data from the Association of British Insurers and the Group Risk Development (Grid) trade bodies, it is one of the top three most prevalent reasons why people submit an insurance claim.

In 2017, the data shows, 11 per cent of income protection payouts were for mental ill health claims. 

And the 2017 Stevenson-Farmer review, Thriving at Work, claims this issue will only get worse.

The review suggests 300,000 people with a long-term mental ill health problem leave work or lose their jobs each year - at a much higher rate than those with physical health problems.

There is a problem building up here, as evidenced by an LV survey, with the average UK household having less than the Money Advice Service's recommended 90 days' worth of outgoings in savings, in case of emergencies.

LV's 2017 Income Roulette survey, carried out among 9,000 adults in the UK, found 37 per cent of people would not have enough savings, and 45 per cent of 25 to 34-years-olds in particular said they could only cope for one month or less without their income.

Most households do not have enough in ready cash in case of emergencies - but as Royal London's State of the Protection Nation research also showed, only 4 per cent of the population have some form of income protection.

It seems the financial resilience of Britons is weak at best - add to this the stress that comes with being financially unstable and it is clear the problem can only get worse.

So how can the group and individual protection market help more people suffering from mental ill health?

Group market

Financial advisers and healthcare providers have found there can be huge variations in the way some employers provide insurance cover and support services for mental health issues, and it can often be as a result of the type of employee benefit that is on offer.

According to Brett Hill, managing director of The Health Insurance Group, there has been a "traditional divide" between the employee assistance programmes (EAPs) offered alongside group income protection, and the provision of mental health support given by private medical insurance (PMI) policies.

Mr Hill says while income protection policies offer good support to staff with mental illness, these benefits are often not understood well by employers and therefore not communicated well to staff.

As a result, employees who need the support are unaware of the group risk policy and what help is available to them if they are in the scheme.

By contrast, more people understand the benefits of workplace PMI, and this is often communicated better - not least because of the tax position - but many PMI policies have not provided the sort of early intervention support needed where mental health conditions are concerned.