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Should there be more flexibility when it comes to underwriting for mental health?

Journalist: Protection 1st, Freelance

ended 02. February 2024

‘One-off’ mental health episodes

I'm interested to hear if it's possible to get life/critical illness cover if you've suffered a ‘one-off’ mental health episode in the past?

It might be linked to divorce, sexual assault, or other serious life events outside of bereavement, but I've heard from advisers that there appears to be a lack of flexibility and ongoing support from providers where these instances occur.

It would be good to get the views from brokers/advisers on whether life and critical illness cover is flexible enough when it comes to mental health conditions and clients who have suffered ‘one off’ mental health episodes?

 

7 responses from the Newspage community

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Michelle Lawson
Director at Lawson Financial
We really should not be encouraging people to talk about their mental health and then penalise them down the line for wanting to protect themselves, their home and/or their loved ones. More innovation is required to underwrite certain life events in a better way where evidence can be provided of things such as assault or trauma. Most mental health has trigger points and an annual review based policy would certainly benefit a lot of people. According to Mind, 1 in 4 people a year in England will experience a mental health problem and 1 in 6 per week a common mental health problem such as anxiety or depression. Additionally, Diabetes UK say that more than 4.3m people live with Diabetes where one insurer will review their policyholders annually and is a much fairer outcome.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
Insurers offer amazing services to existing clients around mental health, yet do not offer insurance to people suffering from mental health issues. So while they embrace the need for mental health support, they do not offer a commmon sense solution when it comes to underwriting. I have a client that recently found out his wife cheated which is now ending in divorce- making him feel worthless and that he has nothing to live for. As he mentioned this to his Dr. he will not get cover as this is considered a high risk because he's had suicidal thoughts.
This is a one off life event and he shouldn't be penalised for the remainder of his life, but if he doesnt disclose this information they may not pay out on death for non disclosure.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Our society is getting more and more comfortable talking about mental health. We live in a society that is more stressful, demanding and expecting that it ever has been. We compare ourselves more than ever. We are also better at diagnosing and treating conditions of the mind. The protection industry hasn't kept up, and it risks non-disclousre from clients trying to get cover. Blanket mental health exclusions are a draconian measure for clients that have experiences struggles in the past, and underwriters need to be more nuaised.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
I'd welcome a move with the times and stopping penalising customers for doing the very thing the same insurers tell you to do annually in mental health week (when it's important for social media engagement) and asking for help. Another gap in the industry is supporting people stuck on an NHS waiting list. Myself as an example. I'd like to be able to concentrate a bit better at work and wanted to get diagnosed for the ADHD anyone who's ever met me would be able to diagnose within 5 minutes. NHS wait time? 4 1/2 years. But not being diagnosed if I was arranging ife insurance I'm treated like a leper. Ultimately I don't think it would be that hard for insurers to utilise exclusions in common sense situations like that.
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Richard Jennings CeMAP
Founder & Managing Director at Richard Jennings Mortgage Services
Insurers absolutely need to review their underwriting approach to Mental Health. Mental Health is such a varied condition with a vast range in severity, period of illness and treatment form that a one size fits all "have you ever suffered mental health" is no longer appropriate, or right for clients. Whist suicide poses still a valid risk for insurers the outdated assumption that anyone suffering from any form of mental illness will commit suicide is arcaic and not fit for purpose. Having counselling services for existing policy holders to use should they suffer in the future is a great support but it does not help those who have suffered previously, or are presently, to obtain cover in the first place.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
The way that the protection industry deals with mental health on applications is incredibly poor. No matter the condition; be it stress, depression, anxiety, or any of a hundred other separate individual conditions they will be dealt with in the same way - by excluding ALL mental health related illnesses from the cover being offered. Imagine if we did that for physical health? A broken leg from a Rugby accident four years ago means that ALL cover for physical injury is excluded from the cover, no matter what it is or how it's caused, for the full lifetime of the policy. It sounds ridiculous when put like that, yet that's exactly what many insurers do with mental health disclosures. To make matters worse those exclusions are often for the lifetime of the plan with no review in the future to see if it remains a risk, despite that same insurer only being concerned with mental illness that has impacted clients in the previous few years on a new application.
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Gary Bush
Financial Adviser at MortgageShop.com
The underwriting and assessment of life insurance proposals from consumers has hardly benefitted from technology advances over the years - insurers still rely, on the whole, on Postman Pat when requesting from GP's medical records and reports. We have found that over the past 3 decades it has got harder, no easier, to gain acceptances from insurance companies when there has been a history of mental illness. The US is groundbreaking with its processes that are based, in the main, on insurers having immediate access to patients' prescription data - they underwrite based on what conditions you are actually taking medication for leading to a vastly improved outcome for applicants. It's not unknown for a life insurance application to be waiting 10 weeks for GP's to process information requests.