Between 2017 and 2018, the HSE or Health and Safety Executive found that 15.4 million working days had been lost because of work-related stress, depression or anxiety. Further to this, in 2011, 31% of all claims with the insurer LV were for Mental Disorders like stress. Legal & General reported that mental health problems were the second most common cause of income protection claims in 2015, making up 22% of its claims with the insurer Aegon saying it accounted for 29% of claims in the same period.
One main thing to bare in mind is that most insurers will generally not cover you for a pre-existing condition. However, due to the policies being underwritten upfront, it can easily be seen what can be covered or not. Commonly depression episodes can be reasonably short lived, often weeks and months but in some cases, it can last a lifetime. This has a massive impact on the people affected by this by causing them to have an impaired ability to go about everyday task which seem normal let alone being able to hold down a career.
For insurers that do offer policies that can cover mental disorders, premium priced are expected to be around 5% more than normal. If the proposer is currently suffering from a disorder, they will likely need to provide medical information / certificates form their GP so that the insurer will know the full extent of the history of the proposers’ condition and whether they are currently under the care of a psychiatrist. This requirement to disclose history on your current and previous medical history will help the insurer consider whether any aspects of your health might be a cause for concern and possibly risk the likelihood of you being offered a policy. Having history of both pre-natal and post-natal depression is less likely to have a policy refused due to it being accepted as a relatively isolated incident. Often insurers will look take into account the history of stress and anxiety in a similar way to help judge whether it was a rare instance or possibly something more common. If the proposer has proof of a longer term, enduring depression, they are much more likely to have the cost of the policy premiums raised by a large amount or even refusal of cover at all.
It is difficult for the insurer to decide what is high risk and what is a lower risk as there is no official scale. Similarly, there is no defined way to judge how serious depression is or how long it may last as it can differ so greatly between would-be policyholders. Income Protection is currently the only sort of insurance that can pay out to the policyholder holder if they become unable to work due to the onset of a mental health condition. It is worth being aware that it is illegal for insurers to charge a much higher premium or turn down a policy unless they can show the policyholder has a specific mental health condition which greatly increases the risk of a claim being made. Critical Illness cover might pay out in the event the policyholder suffers from a heart attack or cancer, chronic conditions like back problems and depression are usually not covered from pre-agreed policies.
So, looking over this in summary:
- Mental Health is usually covered under Income Protection Insurance
- Mental Health claims on income protection are growing providing increased awareness
- Premiums may be around 5% higher than normal to account for an increased risk
- It is illegal for the policyholder to be refused cover unless their condition is proven to be a higher risk
- Income Protection is currently the only sort of insurance that covers mental health conditions
If you are interested in taking out an income protection policy or would just like to discuss the best options for yourself and maybe get a quote as well, Income Protection Expert are here to help. We work closely with some of the top unbiased and independent advisers who work alongside our ‘no pressure guarantee’. This means they will never pressure you to take up any policies or go further than the quote stage if you don’t want to. Why not fill out one of our enquiry forms which links can be found in the sidebar of this post, and we can put you in touch with one of our advisers to get you started?