Industry wants flexibility around mental health underwriting decisions

Protection Review Mental Health Study

Over half of consumers think death by suicide is not covered as standard in life insurance policies, report finds
Over half of consumers think death by suicide is not covered as standard in life insurance policies, report finds
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Almost half of consumers would rather answer questions about mental health online, study finds

More than two-thirds in the life and protection sector think our industry is better at underwriting physical health than mental health, while 64% want greater flexibility around decisions than just ‘accept' or ‘decline', a study unveiled at the Protection Review Conference revealed today.

According to one in five people working in the sector, the industry is ‘very open' to change - however the rest are not so sure.

The survey of over 200 industry professionals and more than 2000 members of the public found that over a quarter of consumers would be more likely to purchase life insurance after an episode of stress, anxiety or depression, while more than two in three (68%) of Brits said they know someone who has or have themselves suffered from these conditions. This figure rises to 74% among women and 18-34 year olds respectively.

According to the report from Protection Review and Alea Risk, 40% think that people who have suffered from a common mental health condition will be able to get life insurance cover with a higher premium, compared to 29% who said they think they can get it as easily as someone without a history of stress, anxiety or depression.

It also found that over half of consumers think death by suicide is not covered as standard in life insurance policies - 31% are unsure - and almost half of consumers said they would rather answer questions about mental health online, rather than in person or on the phone.

Disclosure

Three in five UK consumers (61%) surveyed said they think it is fair for insurers to ask about both the physical health and mental health of prospective customers applying for life or health insurance, however 15% believe it is only fair to ask about physical health and not mental health.

The survey also found that 34% would feel uncomfortable discussing their mental health with a financial adviser or insurer - this rises to over a third (39%) for those who personally suffer from anxiety, depression or stress, compared to just 20% of those who have not personally suffered.

Comparatively 78% said they would feel comfortable talking about their physical health with an insurer or adviser.

"It doesn't take an actuary to put these numbers together to tell you this is the vital issue for insurers to get right today," said Alea Risk's Andrew Wibberley. "If we can be part of the answer and provide meaningful help and support this could be transformative to the value we provide. If we are seen to underwrite unfairly, without flexibility, sensitivity or recognition of real life situations then this will strike a real blow to efforts to present a meaningful option for many when they seek protection."

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