An adviser who saved his client thousands of pounds by challenging a 14 per cent increase to his client’s protection premium has questioned the way providers underwrite mental health.
The adviser, who wished to stay anonymous, had applied for life insurance for his clients — a young couple who had just bought their first home — through the adviser tool Life Quote and had received a preliminary quote from Aviva.
When Life Quote’s health team called the clients to go through a health questionnaire, one of the clients said she had mild obsessive compulsive disorder but that the condition was not debilitating and didn’t affect her working life.
After this, the adviser received an email from Life Quote saying Aviva had uprated the cost of the policy as non-standard underwriting had increased the cost of the policy by 14 per cent due to his client’s answers.
The adviser said: “I was so incensed with what happened. Just because a box had been ticked on mental health that had triggered something in their system.
“They had not checked with the clients’ doctor and had increased the premium by 14 per cent just like that.”
Although the policy was a fairly small life insurance policy as the couple were both young — the monthly premium rose from £13.66 to £15.62 — the 35-year policy would have cost the clients £3,535 more over the life of the term had the adviser not called Aviva out.
The adviser then contacted Aviva, who told him this particular case must have “fallen through the cracks”, and filed an official complaint.
After some investigating into the process, Aviva removed the uprated premium cost and the adviser’s clients’ monthly costs went back to the initial quoted.
The adviser said: “This is so wrong. If I had not flagged it up my client would have been paying a higher premium for no reason.”
He also questioned whether providers in general were doing enough to “keep up with all guises” of mental health.
He said: “It strikes me that mental health is such a wide ranging subject that they could have done more to investigate it.
“In my mind that particular case has not helped the protection name in general. I wonder what insurance companies are doing to get better.”
In recent years the insurance industry has been urged to up its game on mental health to help consumers who struggle with access, high prices and exclusions due to mental health.
Protection underwriters were also accused of misjudging the risk posed by mental health on providers' policies and some industry experts suggested those without medical training misunderstood how different conditions would affect a consumer’s mental state.
An Aviva spokesperson said that, like every protection insurer, Aviva asked a number of underwriting questions covering medical conditions, hazardous pursuits and other risk factors in order to establish a price for the risk to be insured then further ‘reflexive’ questions if a customer disclosed medical conditions within these questions.