Mental Health in Life Insurance: Triggers to Purchasing Insurance

woman with head in hands as world around her blurs

We all enjoy and experience health and wellbeing with the dimensions of physical, mental, social, financial all interlinked and interdependent. Statistics show one in four of us will likely experience a mental issue at some point in life with this often upsetting, confusing, and frightening for both the individual concerned and their families. So, let’s consider what more we could be doing as an industry to support policyholders, colleagues, friends, relations, and their families when they have a mental health issue or are at their most vulnerable. In my opinion there are some areas we should be concentrating on as an industry:

Step 1: Understanding key life stage and financial event triggers

A key first step is simply understanding the main life stage and financial event triggers that have the potential to impact our mental health and wellbeing.

We and our families face an array of potentially negative life events with associated financial shocks, including:

  • job loss/change
  • income fluctuation or debt
  • gambling or addiction issues
  • health problems, injury or disability
  • sleep deprivation
  • relationship breakdown or divorce
  • the death of a spouse, family member, friend, and pet.

Plus, other their life events, such as the purchase/rent of a home or the birth of a child. Even if the event is planned, it can still have a range of significant short, medium and long-term repercussions.

Researchers, charities and industry commentators have long argued that educational, vocational rehabilitation and support interventions designed to raise awareness and signpost to specialists that can help may improve individuals’ financial resilience and outcomes when addressing specific life events. Personal and occupational protection and health insurers are responding to this with the provision of specialist support service and employee assistance programme facilities.

Step 2: Learning from the experience of others

Consult those with lived experience to identify the key issues that we need to address. In relation to insurance, Mental Health UK recently researched the experiences of people with mental health issues who had applied for protection and travel cover and the charity have kindly allowed me to share some key findings: 

  • Most survey respondents commented that the questions in the application were asked insensitively.
  • There was no warning given that the questions being asked might cause some distress.
  • Verbatim quotes from respondents highlight the anxiety and stress of the process - “The application process seemed over-complicated and seemed to imply that I was uninsurable… I was too anxious to question this.”  and “It’s a stressful process but everything is when you suffer from anxiety, depression and stress.”

To help address this, the ABI’s Mental Health in Insurance standards include a focus on improving the application process when it comes to asking appropriate questions.

Step 3: Use these learnings in question wording

Consider the language that we use and provide a warning when we’re about to ask questions related to trigger events, mental health, and wellbeing, especially where the questions relate to self-harm and suicide. We should also explain why we are asking questions and what we will do with the information. As part of our vulnerable customer protocols, include a signpost to mental health support should someone feel distressed during or after the application.

The ABI’s Mental Health in Insurance standards include a focus on improving the application process when it comes to asking appropriate questions.

Step 4: Develop and improve our awareness and knowledge plus that of our colleagues

Ensure that all colleagues taking customers through an application journey be it over the phone and/or face to face understand mental health issues and have the skills to have a conversation. As part of vulnerable customer protocols colleagues should utilise the TEXAS drill. [Thank the customer, Explain the content, eXplicit consent gained to use the information, Ask questions, Signpost help where appropriate]

Step 5: Demystifying underwriting and be open and transparent

Whilst one in four people are likely to experience a mental health problem, with consumers concerned that disclosing a mental health condition will prevent them from getting cover or that they’ll see an increase to the premiums, we need to openly discuss this and tackle the concerns and perceptions that clients may have.

Step 6: Signposting to specialists

The findings from the FCA’s July 2017 ‘Call for evidence on access to insurance’ highlighted the benefits of signposting clients with health conditions and/or disabilities to specialist advisers, as they were found able to obtain more appropriate and affordable cover. The need for, and benefits of, effective signposting are a feature of the responses to Mental Health UK’s research.

 

What next?

The recent ABI’s Mental Health and Insurance Standards are already seeing many insurers making progress in addressing some of the steps above. This week’s Mental Health and Life Insurance Awareness week organized by the IFoA’s Mental Health Working Party is shining a further light on areas the industry can collaborate to improve the journey for those seeking to access life insurance. Hopefully the steps set out here can also be used by insurers to reflect internally on how mental health interacts with triggers that lead to an individual to purchase insurance, and consider what more the insurer can do to support customers.

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