Movember 2021 - The issues around mental health and income protection

Movember 2021

The issues around mental health and income protection

With November being the month of Movember, we have produced some handy blogs, aiming to provide some basic information on how this may affect your access to insurance if you are affected by mental health conditions, prostate or testicular cancer.

We have previously gone through the stages when applying for insurance as well as how these conditions may have a bearing on the terms made available to you, in this blog we will be going through some of the issues you may face such as exclusions added to the policy.

When it comes to life insurance and critical illness cover, exclusions are treated differently. Life insurance does not usually have exclusions placed on it due to health conditions. You might find that critical illness cover does have exclusions depending upon your own, and your family medical history.

If there is an exclusion for a mental health condition, prostate cancer or testicular cancer, you would not then be able to claim for these conditions. For example, if you have prostate cancer it could be that you have a prostate cancer exclusion on your critical illness cover. But watch out! Some insurers might do a full cancer exclusion..

With income protection, insurers will often review your application slightly more strictly than life insurance and critical illness cover. This is because it is so much more likely that you will claim for income protection, than you are the other two insurances. If you do have an existing medical condition or had an injury of some sort in the last few years, it could well be that you see an exclusion on the policy for it. 

When someone has a mental health history, some insurers will bring down the premium slightly if they need to add an exclusion. This is done as they recognise that they are excluding mental health related claims, which is one of the biggest areas that these policies usually payout for.

You may be thinking, so what? Many people aren’t phased by having an exclusion on their policy, especially with an income protection policy, as they think the condition has never stopped them before. Other people do not like exclusions at all and want all conditions to be covered, to be on the safe side of caution. This is of course, down to your own preference.

Depending on the condition you have been diagnosed with, it can sometimes be tricky to source the protection insurance that you’re after. Such as if you have been diagnosed with schizophrenia or bipolar disorder, personal income protection cover doesn’t tend to be available on the protection insurance market. There are a number of options to look into for income replacement, one way is through an accident and sickness policy, that often price quite well but usually exclude existing conditions.

If you’re an employer or employee, it could be that group insurance is recommended. A group income protection policy is to be paid for by the employer, for some or all of its staff. A big benefit of taking out group protection insurance is that it’s much easier to take out without an exclusion. There is usually a free underwriting limit, meaning that insurers won’t look into your medical history up to a certain level of cover. This is often from a minimum of £65k every year.

Case studies

• A man in his mid 30s required protection insurance to provide financial security for his family. He had been diagnosed with anxiety and depression almost 20 years before coming to Cura. he had medication to help control his symptoms and sees a psychologist monthly. There had also been two instances of self harm. An income protection policy was arranged for this client lasting until they reach the age of 68. Their monthly premium is just under £26 per month with a monthly benefit of £1,750. This policy comes with a mental health exclusion, meaning they cannot claim on the policy if they’re off work due to something related to mental health.
  
  
• A man in his 60s came to us needing income protection, life insurance and critical illness cover. He had been diagnosed with prostate cancer a couple of years before and was still living with this condition. When we spoke we established that he was part of a company that was interested in arranging insurance to support their employees. After speaking with the Directors we arranged life insurance, critical illness cover and income protection. This meant that our client was able to insure £65,000 of his income every year, with his employer paying the premiums, and no exclusions.

You might also find it useful to see this case study on life insurance,

• A man in his early 40s needed protection insurance to ensure his mortgage could be paid in the event of his death. He had been diagnosed with testicular cancer around 10 years prior to coming to Cura, he had a testicle removed and had a round of chemotherapy. His family history was also taken into account as his mother had died from cancer in her 40s. This client now has a decreasing life insurance policy for 25 years, with a benefit amount starting at around £160,000 and decreasing each year in line with his mortgage, he pays a monthly premium of just less than £35 per month for this.
  
  

There are many routes to taking out protection insurance. We do this day in and day out, so we can quickly look at your specific circumstances and know the best way to get you covered. Some of the policies might not even cross your mind, as they are not marketed to the masses. Speak with one of our insurance advisers, they will be able to find the best options for you and advise on what you truly need to suit your needs.