Eight in 10 people think being honest and open about disclosing a mental health condition will ramp up the cost of health or protection cover.
This is according to a report from more than 2,000 UK adults for the Institute and Faculty of Actuaries (IFoA) for its report: The anxiety of access: bridging the gap between mental health and financial services.
Fear of costs ramping up
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.
When asked what would make them more comfortable sharing mental health information, respondents highlighted transparency over method, 52% said the single most important factor is knowing disclosure will not automatically increase costs or lead to rejection.
Four in 10 (43%) said a clear explanation of why the information is needed and the same percentage (43%) said knowing the information will be treated sensitively and confidentially.
A similar percentage (41%) valued reassurance about how their information will be used.
Method of disclosure matters less
In contrast, the method of disclosure mattered far less for respondents, with 17% wanting online forms, 18% to speak to a trained adviser and 7% paper forms.
Source of significant stress
The report found nearly half (49%) of UK adults have experienced mental health challenges, yet interacting with financial services providers such as insurers, banks and utility providers can still be a source of significant stress for many.
While the majority of respondents felt supported when claiming, they identified multiple opportunities to improve the claims experience, suggesting that current processes do not yet fully meet the needs of vulnerable customers.
Everyday interactions were found to be harder than they should be, with 66% finding routine interactions stressful, with a strong preference for digital, flexible channels over phone-based communication.
Redefining trust
Looking specifically at insurers, the report calls on the industry to redefine the trust contract with consumers by building transparency into underwriting to reduce fear and encourage disclosure of conditions; prioritising dignity and reasonable adjustments over speed of response in claims; closing the accessibility gap through multi-channel, flexible communication, and protocols that mean customers do not need to keep repeating details of mental health conditions.
Non-disclosure is rational
Emma Hickey of the IFoA Mental Health Working Party said: “When we began exploring mental health in the context of disability insurance, we wanted to understand how people experience interacting with financial services while managing a mental health condition.
“This report highlights that non-disclosure is largely a rational, defensive behaviour. As an industry, we need to give customers confidence that disclosure will not automatically result in higher premiums or declined cover.
“The same principles apply in claims. Taking the time to communicate in the ways people need, can transform often stressful interactions into supportive experiences.
“If we design systems around trust, empathy and accessibility, we will better serve vulnerable customers and strengthen the perception of the industry as a whole.”
Impact of exclusion
Paul Sweeting, IFOA president, added: “Being able to access financial services is a vital part of our day to day lives, but when people feel excluded by the way the system is set-up, this leads to imbalances across society.
“I encourage actuaries and those working in the financial services industry to act on the measures outlined in this report, to protect, empower and reassure customers.”
