Financial advisers have welcomed the Association of British Insurers' new mental health standards, which they hope will help clients whose mental ill health has been a barrier to their financial wellbeing.
Andrew Wilkinson, director of specialist insurance adviser Moneysworth, hailed the launch of the ABI's mental health standards and the website for customers about mental health and insurance as positive steps forward.
He said: "The website is a really good resource for both consumers and advisers", highlighting the signposting feature of the site that helps consumers and advisers.
He added: "It's interesting the ABI should be putting its name to a website that effectively recommends a small number of specialist advisers.
"I am not sure I can remember seeing the ABI recommend any distributors previously, at least not in the life insurance space. So it feels potentially like a significant step forwards, especially as the ABI also endorsed the #accesstoinsurance project and mentioned it may seek to look at further areas of health conditions."
His comments came as the insurance trade body launched the Mental Health Standards to provide better support for customers with mental health conditions when applying for health, travel or protection insurance.
After months of research, in which the ABI and mental health charities found consumers all too often faced barriers when trying to access the service sector, especially in an increasingly digital world, it is hoped the standards will drive consistency and best practice in the field.
The standards mean potential customers with prior or existing mental health conditions will have clearer communications and a better understanding of the process and decisions insurers take when applying for cover.
The standards have been developed in consultation with mental health experts, including Mental Health UK and the Royal College of Psychiatrists.
Among the actions to help consumers are four key standards:
- Improving accessibility by providing support to customers who may need help completing the application form and offering two or more choices of how a customer can communicate with their insurer.
- Supporting customers throughout their application by explaining the process and why questions are being asked.
- Standardising communication with customers by removing technical language, making any exclusions clear and signposting consumers to relevant support services.
- Increasing transparency around decision making by explaining to customers, upon request, what evidence was used to inform the insurer’s decision on cover and a commitment from insurers to regularly review their underwriting approach for mental health conditions.
Insurers will have until December 31, 2021 to implement the standards.
Alongside the standards, Mental Health UK has partnered with the ABI to provide a complementary insurance and mental health guide.
As reported earlier this year by FTAdviser, a Mental Health UK report found 86 per cent of people affected by mental illness did not know where to go for independent advice when applying for insurance.
Yvonne Braun, director of policy for long-term savings at the ABI, said: "Nobody should feel excluded from financial services. Customers across the services sector face too many barriers and insurance is no different.
"People can find it difficult to navigate the increasingly digitised economy, particularly in financial services. For people with mental health conditions, this can be particularly distressing."
She added implementing the mental health standards would help ensure customers get the right help and support they need when choosing to buy insurance, and was "one step to help break down these barriers".
The ABI’s Mental Health Standards initiative is welcome and will challenge and support us in making it easier for customers with existing mental health conditions to apply for and benefit from insurance. -- Debbie KennedySarah Murphy, associate director for advice, information and training at Mental Health UK, said: "Mental illness shouldn’t be a barrier that prevents anyone getting the insurance they need.
"Our research found applying for insurance has often been a difficult and upsetting process to navigate for people who’ve experienced mental health problems, with over two thirds of people feeling they’ve experienced discrimination.
“Thankfully, change is on the horizon and we’re delighted to have supported the ABI to produce these new industry standards and to create the Mental Health & Insurance guide."
Also welcoming the announcement was Debbie Kennedy, director of protection at LV, who said: "Mental health issues are a growing problem and our research indicates that levels of stress and anxiety have risen since the start of the coronavirus outbreak.
"We expect this to manifest in increasing mental health disclosures for new applications and, over time, give rise to more mental-health related claims.
"The ABI’s Mental Health Standards initiative is welcome and will challenge and support us in making it easier for customers with existing mental health conditions to apply for and benefit from insurance. At LV=, this starts with how we ask the right questions."
Ms Murphy added that advice played an "absolutely crucial” role when accessing insurance for individuals with mental health conditions.
She said: "It’s quite easy when you are working in the sector to think ‘well it’s obvious what life insurance and critical illness is’, and throwing terms around like risk assessments.
"But it is not obvious to the general public so there is definitely an education piece and [a need for] clear information and advice about different products, their terms and conditions, what a risk assessment is and why it needs to be done.
"Another element of advice is getting the right product for you based on your particular circumstances and that’s where independent advisers in particular play a crucial role.
"I really encourage advisers to explore the market and [ascertain] which insurers can provide adequate cover for people with pre-existing mental health conditions."
Last week, Financial Adviser produced a CPD-qualifying Guide to Advising Clients in Mental Ill-Health. This can be found here.
simoney.kyriakou@ft.com and rachel.mortimer@ft.com
