The role of protection advisers is vital in reaching customers who fear there is no point in applying for cover due to a past mental health condition.
Meanwhile, an advertising campaign may be needed to dispel myths about the impact of such conditions on the ability to take out private medical insurance (PMI).
This is according to advisers Health & Protection spoke to following release of a report this week polling more than 2,000 UK adults from the Institute and Faculty of Actuaries (IFoA) report: The anxiety of access: bridging the gap between mental health and financial services.
The report found 36% of respondents would feel uncomfortable disclosing mental health information to life, health or income protection insurers, and 79% believed disclosure would probably or definitely increase the cost of cover.
Around two in three (65%) believed it would negatively affect their chances of being offered cover at all.
Customers make assumptions
Emma Astley, owner of Cover My Bubble, told Health & Protection that many of her clients over-disclose, revealing a lot of detail about their mental health journeys which tend to come in many different variations.
“When they enquire with us, they just assume premiums are going to be really expensive,” Astley said.
“But then it’s our job to reassure them and explain that actually, because of x, y, z, what happened in your mental health journey years ago, the thoughts, flare ups and therapy that come with that journey, we can reassure them to say no, the insurers are a lot more understanding especially with regards with what you’ve been through.”
More understanding sector
Astley added that while insurers are generally more understanding of medical histories that may include a baby loss or a bereavement journey, or a separation or childhood trauma, this is not always the case.
“The insurers are a lot more understanding with regards to mental health histories,” she continued. “Well, some of them are. Some of them still rate a lot more than they should do, especially when PTSD comes into it.
“But no, I think clients come through assuming it’s going to cost them a lot of money, but most of the time, I’d say eight times out of 10, there are great outcomes for them, and we can get them covered where they’ve been let down and felt uninsurable before.”
Broader issue
Jo Pawson, head of protection at New Leaf, said the IFoA’s data reflects a broader issue when it comes to mental health and financial protection.
“It’s a common misconception that disclosing any history of mental health challenges will automatically result in higher premiums or an outright decline – but this simply isn’t the reality in most cases,” Pawson said.
“This is where advisers can, and should, play a pivotal role: by helping to challenge these outdated assumptions.
“When clients fear the consequences of disclosure, they may be deterred from applying for cover altogether or not disclosing mental health history on application. Ultimately, this could leave them and their families without the protection they need most.”
Not doing ourselves any favours
But Rhys Schofield, protection adviser for Peak Mortgages and Protection, understands why customers are so reluctant to reveal such conditions.
“We’ve not done ourselves many favours as an industry in the past,” Schofield told Health & Protection.
“Too often have minor mental health disclosures opened cans of worms that don’t really need opening when a customer is buying insurance because they’re worried about getting cancer or being in an accident.”
Invasive and irrelevant questioning
Schofield cited the example of a case where a GP report highlighted that a client had been to a doctor once 15 years ago due to stress at work.
“This meant a whole load of quite invasive and frankly irrelevant follow up questions. I nearly lost the case, which would have left my client and two other directors with no business protection,” Schofield continued.
“Or all the times we have a client sat for years on a waiting list for an adult ADHD diagnosis, often largely because they want to be able to concentrate better at work, but courtesy of being on a waiting list for tests and investigations, it’s a rigmarole to get cover for them.”
Nuance needed
Schofield maintained that too often the sector demonises people who have sought mental health support due to a tough event like a divorce, bereavement or a bad time at work because it’s on their medical records.
“Do they actually suffer the medical condition of stress and anxiety or are they actually just having a very human response to a stressful situation that would make anyone anxious?” he continued.
“The approach all too often just feels over the top when dealing with real people in real situations.
“While I think there has been progress and providers tend to be much more sensible than even a couple of years ago, they could still do much better across the board when it comes to mental health. Zurich, for example, has a question around if a mental health declaration was due to a bereavement and this is the sort of practical solution we should build upon.
“A bit more nuance is desperately needed.”
Common issue
But customer concerns about disclosing a mental health condition is not the preserve of the protection sector.
Kristian Breeze, director of healthcare at Ascend Broking Group, told Health & Protection it is also an issue PMI advisers hear about time and time again.
“We’ll get a new client on the phone, whether it’s a consumer or a business, an HR director may have prior knowledge of certain members of staff health and wellbeing, and they start saying to us, I’m otherwise fit and healthy. Maybe I’m a little bit overweight.
“And we stop them and say, you don’t need to tell us all of this because most policies in the UK are on a moratorium underwriting basis.”
National campaign
Breeze adds there is just not enough information about health insurance.
“I think there needs to be a national advertising campaign about how health insurance works because people just don’t know,” he continued. “They really don’t.
“And when you explain to people how it works, you can almost hear them say, ‘okay, I didn’t know this’.
“It doesn’t matter what’s gone before, it’s the future that matters.”
Emotive cover
Providing an international perspective, SIP Medical Family Office client adviser Chantal Leprêtre told Health & Protection in a world where it has been necessary to campaign for mental health awareness, many may assume the impact of a mental health disclosure will be worse than it actually is.
“On top of that, medical insurance is a particularly emotive form of cover. It’s there to support people when they’re ill and often facing a lot of uncertainty over their future,” Leprêtre said.
“That’s why the prospect of a mental health disclosure affecting access to cover can understandably cause concern.”
Assessing the facts
But Leprêtre added it’s important to remember that insurers assess the facts of each case, rather than making blanket assumptions based on a diagnosis alone.
“In reality, a mental health disclosure is treated like any other medical disclosure on a medical insurance application,” she continued.
“A past or current mental health condition does not automatically mean someone will pay more or be declined cover. Insurers assess each case individually, taking into account factors such as the nature of the condition, its severity, duration, treatment and recovery. The same principles apply to mental health as to any other medical condition. Insurers are simply assessing the actuarial risk presented by a disclosure, which is the basis of underwriting.
“As with any medical condition, a mental health disclosure could result in additional terms, such as a premium loading or a personal exclusion. Equally, it may be accepted on standard terms depending on the individual’s circumstances. There is no one-size-fits-all outcome, which is why each case is considered on its own specifics.”
Honesty is the best policy
Consequently, Leprêtre said she always tells clients to be open and honest when answering application questions.
“Failing to disclose relevant information can create far bigger problems down the line, so transparency is always the best approach,” she concluded.
