×Coronavirus Update: Read our latest news and updates here

Mental health and insurance – what to look out for

Submitted by Dean on 29 January, 2021 - 09:04 with 0 comment

Mental health and insurance – what to look out for

In the UK, 1 in 4 of us will suffer from a mental health condition at some time in our life. As society continues to recognise the struggles of dealing with short-term or long-term depression, we ask – is the insurance industry on board?

Thanks to a shift in society’s attitude to depression and the awareness-raising efforts of a number of mental health charities and famous faces, there is a greater awareness of mental illness than ever, as well as a better understanding of the severe impact it can have on the everyday lives of sufferers. As well as affecting social life and family relationships, it can be difficult to continue functioning as normal when battling with mental health issues, and can have a real impact on the sufferers’ career.

We take a look at what insurance policies exist to help protect people struggling their with mental health and what to look out for.

Income Protection (IP) Insurance
Income protection insurance is designed to protect your monthly income, mortgage payments or a specific loan/card repayment, in case of accident, sickness or unemployment. If claimed, the policy will usually pay out monthly for an unlimited or pre-agreed period of time, rather than giving you a one-off lump sum such as illness insurance offers. They are often taken out by self-employed people or people whose job does not include sick pay benefits, as well as those with a mortgage or loan and those with children and other dependents.

If you have an IP policy, it will most likely state a defined period of time after which the insurer will pay out if you cannot work due to illness, injury or involuntary redundancy. However if you had to take a long leave of absence because of depression, or if caused you to lose your job, would you be covered?

Some insurers still remain cautious about the risks of mental health issues, excluding such problems from their cover or turning down policyholders with pre-existing conditions. Under disability discrimination laws, it is unlawful for insurance providers to unfairly discriminate against someone with a mental health problem, and they cannot turn down a potential policyholder unless they can prove there are increased risks. However, pre-existing conditions are required to be disclosed in insurance policies where the health of the policyholder is a key factor, such as health insurance or income protection. Stating a pre-existing health problem can make the price of your premium rocket.

If you need mental health issues to be included in your policy, check the wording explicitly states that they are covered. There are now several specialist providers who offer cover specifically for people with pre-existing conditions, including mental health problems. People who have previously suffered with depression can experience a 5% average increase in their premiums. Pre- and post-natal depression is often viewed more favourably, and may not cause your premium rate to increase.

Health Insurance
Private health insurance exists to cover you for private medical treatment if you become ill. Similarly to IP, individual policies state what health issues they will and will not cover treatments for.

Answering ‘yes’ to the question ‘have you previously had a mental health problem?’ can instantly label you ‘high risk’ to some insurance companies. The insurer may ask for further information from your doctor, for which they need your written consent, or may ask you to see a doctor of their own choice. Although insurers will often offer insurance to people with mental health problems, they may refuse to pay out on claims relating to pre-existing conditions.

Private health insurance covers a variety of medical treatments, including hospital treatments, medication and outpatient care. Private healthcare can give quicker access to services than through the NHS, and often offers specialist services such as private therapy. If you choose to take out an insurance policy to cover the costs, remember that not all policies cover psychiatric treatments.

Get in touch today to see how we could help you arrange suitable IP insurance, health insurance and more.

Call us on 02920 626 226 or email insurance@watkindavies.com


Get the latest news directly to your inbox

Subscribe to our email newsletter

* indicates required
Newsletter preferences

About Us

Watkin Davies Insurance Consultants are one of Wales’ largest Independent Insurance Brokers, established in 1978 by Roger Watkins. Since this time we have become one of the leading Commercial and Personal Insurance Brokers in the region and the trusted insurance advisor to hundreds of Welsh and UK businesses and individuals.

Head Office

15 & 19 Penlline Road
Cardiff, CF14 2AA
029 2062 6226
Opening Hours
Mon-Fri: 9am to 5.30pm
Sat: 9.30am to 1pm
Sun: Closed

Official Insurance Partner

Official Insurance Partner of the FAW Trust

Official Insurance Partner of the WSA

Membership & Accreditation

Chwarae Teg FairPlay Employer Award

Member of British Insurance Brokers Association