Movember 2021 - Practical access to insurance
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Applying for protection insurance with a mental health condition
In light of Movember, I think it’s important to address how a mental health condition may have an impact on somebody wanting to apply for protection insurance.
Movember is traditionally a month of growing moustaches to raise awareness of testicular and prostate cancer. It has also started to include mental health awareness, especially for men, with there being such a large number that are finding times hard. Men account for 75% of all suicides, with a man dying from suicide each minute of each day (Movember, 2021)
Understanding what life insurance is and identifying your need for protection can sometimes feel difficult, as can applying for life insurance. This can be even more daunting if you have a pre-existing mental health condition. Hopefully after reading this you will have a clearer idea of what protection insurance is, and exactly what will happen when you do apply.
One of the biggest barriers to protection insurance is being unsure about what is going to happen when you apply, and the fear of having to explain your situation to somebody.
Thankfully, the industry world adapts all of the time and things are much more accessible than they used to be. Our MD Kathryn was declined insurance by all but two insurers 10 years ago, because she has generalised anxiety disorder and had experienced agoraphobia. Now, many insurers are much more understanding of mental health conditions.
Kathryn has been at the forefront of challenging the way that insurers view mental health, and has helped to shape products and the underwriting stances of insurers.
There are different types of protection insurance, and you may not feel like you need all of them, but they are definitely worth looking into. Below are the most common types of protection insurance, each of which Cura offers advice on.
Life insurance will pay a lump sum to your loved ones if you die. This is often taken out if you have any dependents, such as children, or have a mortgage that will need to be paid. It’s one of the simplest insurances that you can get, it does what it says, if you die it pays out.
Critical illness cover pays out a cash lump sum of money, if you are diagnosed with a medical condition that is listed in the insurer’s claims set e.g. cancer, heart attack, stroke. This policy is about financially supporting you if you are really ill. You can use the money for any number of things, people often choose to pay off mortgages, pay for private treatment or adaptations to the home.
Income protection pays you a replacement of your monthly income, if you are unable to work due to ill health. This is for any medical reason that means you cannot carry on doing your job.
Term and Whole of Life
When you’re applying for life insurance, there’s two main ways, kind of, to go about it. So you’ve got term insurance and whole of life insurance. Term insurance is one where there’s a specific term. So it could be that it lasts 22 years, 35 years. It will usually match your mortgage length, possibly the age of your children reaching an age of independence, or your retirement age. Whole of life insurance is different because that will just keep going and going and going until a claim is made.
So when you have a mental health condition and you’re applying for insurance, there are a number of different things that can happen in, sort of like what happens in the terms that you could be offered.
So if you have anxiety, stress, depression, it may be that you are able to apply for the insurances and that they’re accepted straight away without further medical evidence. If you have a condition like bipolar disorder, post-traumatic stress disorder, schizophrenia, then it’s more likely that the insurer is going to want to see a report from your GP. Not all insurers, but the majority will ask for that. And that’s just to confirm the dates of diagnosis, your medications and treatments, and how you are, in general, responding to those treatments. And then what happens is that you could potentially be given a certain set of terms. So for some people, the people who are maybe able to be accepted straight away and online, they may be able to access something known as standard terms, which is the basic price for the cover. For other people, it may be that they’re offered non-standard terms.
Now that would mean that the premium’s being increased. And the real trick here is to find the insurer that is going to increase the premium by the least amount. There is also the potential that the application you may find is postponed or declined. And at that point it can be very, very disheartening. I’ve had that myself, and it’s really important to then maybe seek advice as to who to speak to.
There are different types of life insurance. Term assurance is when there is a specific period of time, for example 20 years or 25 years. This would usually be the length of your mortgage, the number of years until your dependents become independent or until retirement age. Whole of life insurance is different as it will continue until a claim is made, it just keeps on going until you die.
A common misconception with life insurance is that it may not always pay out. You can kind of think of insurance as having two departments. The first is general insurance that covers your car, house, washing machine, travel and private medical insurance. The second is protection insurance which is what we do: life insurance, critical illness cover and income protection.
Life insurance actually works very differently to other types of insurance, and the rates of successful claims with life insurance is much higher than many people think. The Association of British Insurers most recent report showed that 98% of all claims for life insurance, critical illness cover and income protection were paid, with £6.2 billion paid in 2020 (ABI, 2021).
The times that claims are not paid is usually because someone has not paid their premiums up-to-date, or they have not answered the application questions truthfully. This is always an awful circumstance and no-one wants this to happen.
Many people think that insurers look for any loophole to not pay. It might sound daft but insurers do want to pay out, they want to help people and they want people to trust them, so denying a claim is avoided as much as possible.
Step by Step
When it comes to applying for insurance, there are a number of different things that need to happen.
The first thing is for you to decide that you need insurance and probably to have an idea as to how much cover you would like. The next stage is deciding what route you would like to take. So that could be a price comparison site, it could be going direct to an insurer, it could be speaking to an adviser like myself.
When you speak to an adviser, the process changes ever so slightly because we are there obviously to help you to determine if the insurance you’re going for is actually going to do what you’re wanting it to do, and to make sure it’s all at the right levels. But whatever route you want to go down, there are certain stages that happen at the next bit for most UK insurers. So an insurance application form needs to be done. Now that will go over your core information, such as your name, date of birth, address. It will also go through your medical history. So that would be things like, have you ever had cancer, if you have Parkinson’s disease, and it will ask about your mental health as well. It will also ask about your immediate medical, your family medical history. And it will ask things about whether or not you are doing things like skydiving on a weekend, or riding a motorbike, different things like that. And there are a couple of things that happen once the application is with the insurer.
It can either be accepted and sent straight away which is really the ideal scenario. It may be that they ask to see a report from your GP to confirm your health. That is only done with your express permission, and it is your right to see that report before it goes to the insurer, and you can access it afterwards as well, just to make sure that you are feeling comfortable that it really represents you accurately. They’re the main things that can happen.
There are a couple of other things that can happen too. There may be something known as a tele interview which will be where a medical professional rings you and just makes sure that they have all the information that the insurer needs, or potentially what’s known as a nurses screen, where a nurse will come to you at a time that suits you and does a few different checks, such as your height and weight, blood pressure, some blood tests, and urine analysis. Again, just to make sure that the insurer has a really clear picture of your health before they are able to fully assess your application.
The first thing you need to consider when taking out insurance is how much cover you think you would like, and what route you would like to take.
Life insurance can be taken out by using a price comparison website, going directly to an insurance company, or you can use an insurance adviser like us at Cura. Cura’s role is to help you figure out what insurance you need, what you want it to do and to find one that suits your needs. Our team also helps with things such as application forms, Trusts and chasing any medical records that might be asked for by the insurer (with your permission).
To break it down arranging insurance follows this route
- Decide on what you want
- Choose the right insurer
- Apply for your cover
- Maybe wait for the insurer to see a report from your GP
- The insurer underwrites your application
- Terms are offered where possible
- You choose a start date and set up your payments
Advised vs Online
When you’re applying for the insurances it’s really important to know what kind of level of support you’re going to get in different routes. So, when you are looking at an online application, that’s something that you’re doing yourself, and you’ve chosen which insurance you want, which insurer you want and the amount of cover that you’re wanting. So that’d be classed as what’s known as a, in a sense it’s a non-advised route. In a sense, you are doing that yourself. The same would happen if you went directly to an insurer and spoke to somebody there, they’re not going to be determining the amount of cover that you need. You will just to be telling them what it is that you want.
When you speak to advisers in the UK, there are two different types that you may be speaking to. They are both good for different reasons and it just comes down to what you feel most comfortable with and what suits you. So what you may find is that you may speak to somebody and they are what’s known as going down a non-advised route. So the non-advised route means that you will speak to them and you will say, “I would like this insurance. And I would like it to cover me for this much, what can you do?” And that person will come back to you and they’ll say, “Right, okay. You’re wanting this much, you’re wanting that much cover, okay, I’ve got these insurers I’m looking at, I think this one over here’s going to be the best price. Shall we go for it?” Which is absolutely fine and that may work perfectly for you.
If you go down at advised route, that’s slightly different. So that’d be something that say, I would be doing. So in an advised route, you would speak to somebody and you would say to them, “I want this.” And then like myself, I’ll be going, “Okay, let’s just chat about everything and let me make sure that what you’re wanting and from that is actually going to achieve what you’re wanting it to achieve in the long run.” I would then be going away, doing the research and coming back and saying, “Right, I’ve researched everybody. That person over there is increasing the premium to that much, whereas this person over here is only doing it to this much. So I think we should give them a go.” And that’s kind of where the difference is.
All of the options work very well for different people in different situations. It’s finding the one that you feel is going to be the best route for you.
When taking out protection insurance, this can either be advised or non-advised. An advisers service means that you will speak with an adviser who will assess your needs, tell you what insurances you need, and choose the right insurer for you.
Some advisers offer a non-advised service, they will find a policy that matches what you want but this doesn’t necessarily mean it’s a policy matching what you truly need. This might work well for you, you might know exactly what you want and they can find a policy that matches what you’re asking for.
Then there’s online comparison sites, which will show you a whole range of options meeting the criteria you’ve chosen. This is also seen as a non-advised route. You’re making the choice of what you need and the insurer that you want to try applying to.
One thing we have found is that there are many people using price comparison sites purely because they don’t want to have to explain their situation to somebody, or they feel uncomfortable or like they will be judged. There are benefits to using a price comparison website and it could be that you find a great policy which really suits your needs, but equally it could be that you take out a policy that doesn’t really do what you want it to.
Another thing with price comparison sites is that you may be more likely to see declines or higher premiums, as you might choose an insurer that isn’t the best match for your medical history. If your cover is declined then you either need to start the whole process again, or you may even become disheartened and decide to not try for insurance again.
Our protection advisers will do research and look into your options thoroughly, before an application is even placed with the insurer. That way we can come to you from the start and say which insurer is going to be the best fit for you.
Speaking to somebody about your circumstances may be difficult and we definitely wouldn’t want to downplay that. Only you can decide if you feel ok to speak with an adviser or not, and there are ways that we can support you by talking over email, you potentially completing applications yourself or maybe even discussing insurance policies that do not need to have any details about your medical history. Our advisers are experienced in speaking to people with mental health conditions and you will not experience any judgement from our team.
The main thing is finding a protection adviser who you’re comfortable with, can really put you at ease and make conversations much easier.
Tips for when you apply
When you are considering possibly using an adviser to help you get the insurances, there are a couple of key things to really think about. The first thing for me, and the thing that absolutely stands out, is making sure that you’re speaking to somebody who is making you feel comfortable. You could speak to the best adviser in the world, and if you’re not gelling with them, if you’re not getting along with them, then you’re probably not going to trust what they’ve put in place for you. So it’s really important. And it’s absolutely fine for you to turn around and just say to yourself, you know what? This isn’t just working for me right now. They’ve not been able to adapt to the way that I need them to. I’ll try somebody else.
You are within your rights to ask the adviser for what’s known as their FCA number, that’s the Financial Conduct Authority number. All regulated advisers in the UK have that, and absolutely fine for you to ask somebody for that so that you can go ahead and check that they are who they say they are, and that they are registered with the regulators within our sector.
There are a couple of other things as well. Sometimes when you speak to people, they may have what’s known as a tied insurer offering, doing something which is known as a fair analysis of the whole of the market. So, if somebody is tied, that could mean that they were only able to speak to one insurer, or maybe five insurers, maybe ten.
If somebody’s doing a fair analysis of the whole of the market, they’ll be doing a really big amount of insurers that they will be looking at for you. It’s not really possible for anybody to say that they are absolutely whole of market, on the basis that some insurers won’t work with advisers, so nobody can be in that position. But the important thing is just to know what you are being able to give access to. What are they going to be able to get to you? That person with the one insurer might have the perfect insurer for you but others who have a bit more access may be able to just get a slightly different option that is better in some ways.
When considering using an adviser, make sure you speak with somebody who makes you feel comfortable. There are many advisers out there who may be brilliant at their job, but if you’re not connecting with them or feeling comfortable then you may not 100% trust their advice. Ultimately you need to be confident in what is being arranged for you, this is you and your family’s financial future.
All legitimate advisers within the UK are authorised and regulated by the Financial Conduct Authority, so this is something to look for. Ask for their FCA number and do a search for them on the FCA register. If someone is hesitant about giving you this number, that should set off alarm bells to you.
An adviser can be tied, which means they are only able to consider a certain number of insurers. This might be fine for you, but the adviser might not have access to the best insurer for you.
An adviser might do what is known as a fair analysis of the industry, which means they will look into a wide range of insurers to find the best option for you. No adviser can say that they speak with every insurer in the market, as some insurers will not work with advisers and they will only directly with consumers.
To apply for your life insurance, an application form will need to be completed. These often ask a range of questions, starting with the basics such as your name, date of birth and address. It will then ask some more in depth questions about your medical history, your mental health and your immediate family history. If you don’t want to talk about your health in detail, we have options that you can look at that ask very few questions.
When it comes to applying for the insurances you’re probably going to see written down on the forms, if you’re doing them yourself online, or hear it from an insurer or an adviser like myself if you do speak to somebody that will be saying, please make sure that you answer these forms as truthfully and honestly as possible to the best of your knowledge. And that might seem a little bit silly as if you don’t need to be told that. It might even come across a little bit offensive in a sense of, well, I’m not going to lie so why am I being asked this? The reason being is that we’re just trying at all stages to make sure that we won’t end up in a situation, where there’ll be something known as a nondisclosure.
It’s really important to make sure that the questions that are asked by the insurer are being answered in the right way. And whilst they are, obviously the forms are black and white and the questions are the questions, sometimes they can be a little bit interpretive. And so that’s why it can be really important.
If you’re unsure, just maybe ask somebody to give you a little bit of guidance. We’ve all seen stories in the papers and different things where insurances haven’t paid out. And they are horrible situations that nobody wants to face. And I think what’s sometimes misunderstood from the life insurance side of things, the life insurance, the critical illness cover, the income protection side, that falls all under, let’s say it’s a sector.
So let’s just say it’s a department of protection insurance. It works very differently to other insurances. And the successful claims rates for these policies are well up into the high 90%. When policies don’t pay out, it’s typically for a number of core reasons. And I won’t say that this is the same situation for everybody, but what usually happens in these situations is that it’s maybe being that somebody hasn’t kept their premiums up to date, which means that the policies ended or that may be these questions haven’t been answered exactly how the insurer intended them to be.
When it comes to disclosing a pre-existing condition, whether it be physical or psychological, it is crucial that you’re open and honest, as the last thing you want is a non-disclosure! If you’re unsure on anything in the application, it’s always best to ask somebody for a bit of guidance. The questions are usually quite clear, but sometimes you can look at them and wonder what the insurer is actually asking for.
As well as your health there are also questions about your hobbies and travel. Insurers really like to know if you get up to anything exciting, such as the odd skydive or motorbike race! Super fun, but also potentially risky and everything in the insurance world is about risk.
With the application completed, it’s then sent to the insurer and one of two things will usually happen. A decision may be made straight away, or the insurer may want to look a little deeper and ask for some further information regarding some of the answers on your application. This happens a lot of the time, so isn’t something to be worried about but it does make the application process slightly longer.
The insurer may just have a couple of questions to be answered by yourself, or they may ask for a report from your GP, mainly to confirm things such as your treatment, date of diagnosis and any long term symptoms that you have (of course, only ever with your permission, and you can also read the report first).
Times that a GP report might be needed are
- Bipolar disorder
- Borderline personality disorder
- Care of a Community Mental Health Team
- Inpatient treatment
- Post Traumatic Stress Disorder
- Psychiatrist sessions
- Suicidal thoughts
- Suicide attempt
A GP report isn’t always needed in these situations, but it’s best to be prepared just in case. Some insurers now only ask about certain events within the last 5 or 10 years, so it might be that your experience doesn’t even need to be disclosed.
There are many times where having experienced anxiety, stress and/or depression, your application can be accepted straight away without further medical evidence.
The insurer will then take everything into account when offering terms. You may be offered standard terms, where your premium will be the usual amount, or you may be offered non-standard terms, where there may be an increase to the premium or an exclusion on your policy.
An application can also be postponed or declined, this can be disheartening and it’s good to have somebody there to offer support. Sometimes the decline is sent to you in a written letter that can be quite blunt, but we have been working with insurers and our industry trade bodies to try and change this. It’s not happening overnight, but we are making progress.
If you are postponed or declined cover, one of our insurance advisers would be able to offer further guidance and look into other options for you.
If you’re in a position where you think you might need any type of protection insurance, having a mental health condition shouldn’t stop you from applying. You need protection insurance just like anybody else.
ABI. (2021). Record amount paid out to help families cope with bereavement, ill health, and injury ABI. [online] Available at: https://www.abi.org.uk/news/news-articles/2021/05/record-amount-paid-out-to-help-families-cope-with-bereavement-ill-health-and-injury/ [Accessed 15 Nov. 2021].
Movember. (2021). Movember. [online] Available at: https://uk.movember.com/about/cause [Accessed 15 Nov. 2021].
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