Mental health disorders can be life-long or short term conditions which can vary in severity of the symptoms caused. Arranging life insurance, critical illness cover and income protection is usually possible, unless there have been any recent thoughts of self-harm or suicide. It can also be difficult to arrange cover for someone with recent or current symptoms of certain conditions such as bipolar, schizophrenia or psychosis.

Someone with a common mental health disorder, such as depression or anxiety, can usually find a life insurance or critical illness policy on standard rates, if the condition was relatively mild. This would usually still be the case even if you are currently taking anti-depressant medication. If you are still experiencing symptoms of depression then there may be an increase in the premium.

If you have been treated by a psychiatrist for obsessive-compulsive personality disorder, had in-patient hospital treatment or had any thoughts of self-harm then insurers will usually require a report from your doctor. This will provide the underwriters with the information they require in order to make a full assessment of the application. Depending on the severity and the types of treatment prescribed, the premiums could be increased or certain conditions excluded.

  • Case Study

    We were approached by Mrs L, a 51 year old smoker who required life insurance to offer financial security to her children should she pass away.

    Unfortunately Mrs L had been turned down by two Insurance Providers due to her medical history. She had suffered depression since her teenage years which had led to an eating disorder, alcohol abuse and a residential stay in a rehabilitation unit. However these issues were all historic and Mrs L had not suffered any mental health symptoms or required treatment in the past 5 years.

    Although Mrs L is slightly underweight with a BMI of 17.9 (the healthy range is 18.5 to 24.9), she is otherwise physically healthy.

    Before applying for a new policy, we obtain as much medical information as possible from the client in order to find out the expected underwriting decision. The client is then fully aware of the expected costs before going through the application process. Unfortunately, due to the sensitivity of Mrs L’s medical history, this wasn’t possible. We suggested that Mrs L applied to the Insurance Provider who we believed would provide the most sympathetic decision. Assuming that the Provider offered a policy, Mrs L could then decide whether the premium was affordable.

    An application was submitted for a level term life or earlier terminal illness policy with a sum assured of £20,000 over a term of 20 years for a quoted premium of £12.28. The Insurance Provider requested a completed medical questionnaire from Mrs L’s GP. Once received, the provider offered a policy albeit with a ‘loading’ of 200% on top of the quoted premium which increased it to a total cost of £36.84 a month.

    Whilst Mrs L was pleased to be offered life insurance, the premium was beyond her budget. We agreed to reduce the sum assured to £10,000 which in turn, reduced the premium to £18.42 a month. This fitted within Mrs L’s budget and gave her piece of mind that her two children would have a legacy should she pass away.

    Please note that the premiums provided are indicative only and based on this specific example, which is shown for information purposes only. Your own circumstances will determine whether the amount payable is more or less than the figure quoted. Premiums correct as of Dec 2018.

What impact will mental health issues have on Life Insurance premiums?

Prices for Life Insurance are very dependant on your individual circumstances. For example someone who has a history of suicide attempts and bipolar would pay as much as three times the monthly premium as someone who has mild depression. Many insurers have different rules and underwriting philosophies so it is vitally important that you choose the right provider.

What impact will mental health issues have on Critical Illness premiums?

Generally any increase in premium relates to life insurance only and does not affect the critical illness cover. However any conditions directly related to a mental health condition such as bipolar will be excluded from the policy.

What impact will mental health issues have on Income Protection premiums?

It is usually possible to arrange an income protection policy for someone with a history of mental health problems. However if the condition has been present within the past 5 years or you are currently receiving treatment then all insurers will exclude any claims which relate to any mental illnesses.

It may be possible to arrange the policy without any exclusions if the condition was mild and you have been free of any mental health issues and/or medication for a certain number of years.

What information do the insurers need?

Most applications will not need any medical evidence because of mental health problems so long as they are properly disclosed in the application form. The insurer will however ask a range of questions therefore you should ensure that you know:

1)Name of the condition and date of diagnosis

2)Treatment received and who you have visited about the condition e.g. GP, nurse

3)Date of last symptoms and time off work

4)Whether or not it was due to a specific life event e.g. bereavement, work

5)Dates of any self-harm or suicide attempts

6)Time off work as a direct result of the condition

If you feel uncomfortable providing details to your adviser then it is possible to give the information directly to the insurer.

Would you like some advice?

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