People who have been offered cover have conditions such as personality disorders and PTSD
Royal London has, since March, been piloting a mental health underwriting philosophy using a panel of adviser firms - Cura, Moneysworth and The Insurance Surgery - which specialise in sourcing cover for those with a history or mental or physical health conditions.
Designed to assign cover to those with severe mental health conditions who would traditionally be declined, the insurer said it has offered cover to 75% of applicants who would typically be uninsurable. This includes those who have psychosis, schizophrenia and severe post-traumatic stress disorder.
Ten percent, meanwhile, have been postponed with the possibility of being offered cover at a later date, while 15% were declined due to the condition being too severe or unstable.
Medical evidence is required for all applicants, with online decisions for applications switched off. Underwriters are working with a consultant psychologist to discuss individual medical circumstances.
Craig Paterson, underwriting and claims philosophy manager at Royal London, said: "Our underwriting philosophy as a protection provider is to offer cover to as many customers as possible. With mental health being the most commonly disclosed condition for Royal London customers, we wanted to explore how we can provide cover for those with a severe mental health condition. Through the pilot we have successfully managed to offer protection to individuals who would traditionally be declined life insurance cover. The response from customers and advisers has been overwhelmingly positive and we've seen high take up rates for cover despite the underwriting process being longer."
According to Royal London, mental health conditions are the most commonly disclosed conditions by customers applying for its protection cover, with around one in 10 (9.5%) saying they have or have had mental health condition. The insurer also said that while 95% of those customers who disclose such a condition are offered cover, with around 80% paying premiums at standard rates, a small proportion are declined or postponed often leaving those who are uninsured feeling that protection is inaccessible.
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