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Mental health and your life insurance

Around 1 in 4 people in the UK will experience a mental health problem each year. Yet, we hear a number of cases where life insurance providers still discriminate against people with a disorder. With numbers rising, it’s about time we start tackling the issue to improve cover options for those suffering from mental health.

Why is mental health a risk for insurance providers?

People with mental health disorders are considered ‘high risk’ by insurance providers. This is due to several reasons.

  • People with severe mental health disorders have a lower life expectancy than those without. In fact, research has shown that it can reduce your life expectancy by up to 25 years.
  • Those suffering from a mental health condition are more likely to smoke which increases your premiums regardless of a health condition.
  • Obesity rates are higher in people suffering from mental health, which increases the risk of heart disease. In fact, those suffering from a mental health disorder are almost twice as likely to pass away from coronary heart disease than the general population.
  • Physical activity rates are lower in general for people who suffer from mental health.
  • Alcohol and drug misuse levels increase amongst those with mental health issues.
  • The side effects of long-term psychiatric medication can increase the risk.
  • Levels of self-harm and suicidal thoughts are increasing each year. Around 6.7 in every 100 people were reported to attempt suicide in 2015.

Challenges in getting life insurance 

Obtaining life insurance could be difficult for people suffering from a mental illness and not just in the sense that the provider may decline them for cover.

Money worries and stress

Coping in this economy with money, jobs and benefits can make it harder for people to cope with a mental illness. These factors have increased levels of self-harm and suicidal thoughts over the years affecting life insurance premiums.

A lack of life insurance policy could lead to further money worries, stress and self-esteem issues. All of which can exacerbate a condition and make it even harder for people to cope. With these factors in mind, it can add a future fear of trying to obtain life insurance. If they are turned away you may feel singled out. Particularly for people who are otherwise fit and healthy.

Declaring a mental health disorder

When you apply for a life insurance policy, you need to declare any medical conditions that you have suffered from in the last 5 years. Talking about mental health can be difficult for some people, which could lead to non-disclosure. As a result, the insurance provider wouldn’t pay out on a claim.

Younger people are suffering

1 in 10 children from the ages of 5 to 16 are reported as having a clinically diagnosed mental health disorder. And by 2030 it is estimated that there will be approximately 2 million more adults with mental health problems than there were in 2013.

Waiting times for psychological therapy on the NHS varies, but some can wait for around 6 months before being initially seen for treatment. Younger people, especially those living in deprived areas are less likely to recover from their condition which could mean they are never able to receive affordable life insurance.

depressed girl

GP reports are bound by facts

Like most conditions, mental illness has different levels of severity. Some people may suffer bouts of depression after losing a family member or after going through a divorce. This is really common and perfectly normal. The circumstances surrounding the cause of depression, if there is one, aren’t written within a GP report. A GP must

Therefore, customers could be penalised and pay higher premiums the same as someone suffering from major chronic depression. Whilst each case is treated individually, the reasons behind the condition aren’t always a factor during the underwriting process.

Life insurance through your workplace

If you receive life insurance from your employer, you may find yourself discussing health issues that you may not want to declare. Whilst not all employers discriminate against mental illness, there are still many employers who aren’t always supportive.

It’s not often that people feel comfortable recalling dark moments and feelings to your employer. This could lead to non-disclosure and mean that people aren’t sufficiently covered.

Are people always declined?

It’s true that many individuals suffer discrimination against the hands of life insurance providers, but it’s not always bad news.

If you have suffered in the past

Normally insurance providers are more lenient if your condition is under control or in your medical history. In fact, they don’t need to know any condition that you suffered more than 5 years ago. Sometimes, they will consider cases after 2 years as well. 

If you’re fit and healthy

Other factors such as smoking, alcohol and drug intake, weight and lifestyle can affect the cost of your life insurance premiums. It may be that a combination of these and your mental health could be the reason behind your increased risk and, therefore, higher premiums. However, if you are otherwise fit and healthy you’re unlikely to have problems obtaining life insurance.

If you declare a reason

Although it’s not required, if you declare the reason behind mental illness such as a bereavement or divorce, then your insurance provider may view you as less of a risk. Your GP report will not contain the circumstances surrounding your condition, so it may be up to you to let you insurance provider know. You may then be able to avoid higher premiums.

Each case is treated individually 

Although it may seem that mental health conditions are discriminated against in general, insurance providers are actually quite good at taking each case as it comes. Every individual is assessed on their own accord and so loadings on premiums aren’t always the same. In some cases, you may be declined, but others you may get offered standard rates. Alternatively, you could be offered exclusions for any conditions related to your mental health or exclusions for just 1 to 2 years.

The Equality Act 2010

The Equality Act 2010 states that it is unlawful for insurers to discriminate against those with a disability UNLESS your disability increases your risk. More common conditions such as minor or moderate depression and anxiety may no increase your risk levels. Particularly, if you are otherwise fit and healthy.

Mental illnesses aren’t always considered to be a disability, so it can depend on the severity of the condition. But your insurance provider needs to demonstrate that your condition increases the risk of you dying before they can charge higher premiums or decline someone for cover.

consoling

What do insurance providers need to know?

Although it can be difficult to discuss your medical conditions, it is important that you disclose the correct information. Any non-disclosure of conditions could result in a claim not being paid out.

  • If you have suffered from a mental health condition within the last 5 years (including stress, anxiety and depression)
  • The date that you were first diagnosed
  • Any medication taken
  • If you have ever had suicidal thoughts, tried to self-harm or attempted suicide
  • If you have had any psychological conditions requiring hospitalisation
  • Any other treatment your receive such as counselling
  • If you have been turned down by an insurance provider in the past

What counts as a mental health disorder?

Mental illness refers to a wide range of conditions, including any disorders that affect your mood and behaviour. Depression, anxiety, schizophrenia and bipolar disorder are the most common illnesses in the UK. In addition to this, smaller conditions may impact your life insurance. This includes stress, post-natal depression, ADHD, eating disorders, persistent tiredness, ME and addictions.

Whilst milder conditions may still get standard rates, it is important that you declare any condition no matter how severe.

Are attitudes really changing?

Insurance providers are getting better at offering life insurance to those suffering with mental health. And, just because you get turned down by one provider, doesn’t mean you will be turned away from them all.

Every insurance provider has their own criteria when it comes to assessing the risk, so it’s important not to give up. 1 in 6 adults report a common mental health problem such as anxiety and depression in any given week, so discrimination could remove a huge customer base from insurance providers.

Insurance providers do assess each case individually and some insurance providers are better than others at covering mental health. The industry has shown increased understanding of conditions and the pressures facing an individual with a mental health condition. So, fighting to get a life insurance policy in the first place shouldn’t need to add to those pressures.

Additional benefits of life insurance

Some providers go the extra mile when providing cover for their customers. Insurance providers such as Vitality, Royal London and Aegon partner with other health providers to offer specialist services such as counselling and treatment for any condition including mental illness.

What’s more, some even offer emergency GP appointments and cover the cost of private prescriptions. Some insurance providers even provide bereavement counselling too. These services can be tailored to your needs and offer support and advice for those that need it, free of charge.

Get advice on your life insurance

If you suffer from a mental health condition you can speak to an independent protection advisor who can help to compare providers and advise you on your options based on your circumstances.

At Business Cover Expert, our partnered advisors provide advice free of charge and can compare a panel of some of the best insurance providers in the UK to find you the best rates on not just life insurance, but critical illness cover and private health insurance too.

What’s more, if you’ve been symptom-free for a few years and already have cover, it might be worth renewing your cover to see if you can get cheaper premiums. Especially, if you are otherwise fit and healthy. Additionally, if you’ve stopped smoking, obtained a healthy BMI and increase your health you may be able to get better rates on your life insurance.

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