The insurance industry has been urged to up its game on mental health as consumers with mental health conditions are struggling with access, high prices and exclusions.
Speaking at the Protection Review conference this morning (July 11), Yvonne Braun, director of long-term savings and protection at the Association of British Insurers, said the insurance sector was a "sleeping giant" that had "huge but unrealised" potential to protect the UK against mental health.
So far, the industry had "done a lot of talking" about mental health — but "talk is cheap", Ms Braun told the conference.
The problems highlighted in the industry included high prices caused by underwriting practices and the way advisers and providers ask consumers to disclose information about their mental health.
Ms Braun said: "Why do insurers ask about stress and anxiety in the same breath as asking about hospitalisation and suicide?
"And how do we go about asking these things with empathy, humanity and respect?"
Speaking at the same conference, Helen Undy, chief executive of Money and Mental Health, revealed research by the charity that found high prices, exclusions, disclosure and accessibility were the key barriers between mental health patients and protection.
The charity’s mystery shopper initiative found that a consumer was charged between 100 and 300 per cent more for having a bipolar disorder diagnosis for the same protection product, despite the illness never affecting the consumer’s day-to-day life due to medication.
The research also found a disproportionate increase in premium costs for mental health conditions over what would be considered an equivalent physical health issue.
One consumer told the charity that struggling to get any cover due to mental health problems had stopped them from buying travel insurance for multiple trips, a scenario which she described as "dangerous for everyone with a mental health problem".
Ms Undy told the conference it was worrying that people were often unclear on whether their cover excluded or included their mental health problem.
She said: "People are being offered cover that excludes their mental health. That leads to a range of problems.
"People think they are unable to get insurance that properly covers them or people are unaware and they think they have cover when they don’t."
She went on to say that for people with mental health cover, having a group income protection policy through their employer was the best option but too few people had access to that.
A further problem the Money and Mental Health research found was that consumers often didn’t take out protection because they didn’t feel able to discuss their mental health problems.
This meant consumers often suffered with loyalty penalties because they didn’t want to switch to avoid such questions or sidestepped the process all together.
Ms Undy said: "Getting this bit right isn’t rocket science. I understand that changing underwriting methods may take time, but we have to get this right."