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Income protection and mental health

Income protection and mental health

22 Jul 2021

If you are looking for an insurance product to cover mental health conditions, look no further than income protection. Income protection covers a range of mental health conditions, including stress and depression. And actually, mental health conditions are one of the most common reasons for an income protection claim.

Unsurprisingly, the proportion of income protection claims caused by mental illness doubled during 2020. Not only this but 1 in 4 of us will be affected by mental illness in our lifetime and it’s actually one of the biggest causes of work absence in the UK. This is why we at LifeSearch think it’s fantastic to see the insurance industry taking mental health and its implications seriously.

How can income protection help me?

Income protection is designed to pay out a portion of your regular salary if you are out of work due to serious physical or mental illness, or an injury. These payouts will continue until you either recover and go back to work, reach state pension age and retire or until you pass away. Whichever comes first. Short term income protection is also available which could payout for one or two years. 

If you are suffering from mental illness and need to take some time away from your job, income protection not only means you’ll be able to continue paying your bills and putting food on the table, but it also takes away those financial worries that may hinder your recovery. 

Let’s hope you never have to claim and can simply enjoy the peace of mind that you are covered, but if you do find yourself needing to claim, income protection will step in and support you and your family when you need it most.

Do I have to tell my insurer about my mental health condition?

Whether you currently have a mental condition or have done so in the past, it is so important that you disclose this to your insurance provider when taking out your policy. It can be tempting to leave out information, particularly sensitive information surrounding your mental health, but doing so can result in issues later down the line.

For example:

  • Your policy could be canceled
  • Your policy may become void and you won’t be able to claim on anything - even if it is not related to your mental health problem
  • You could be charged a lump sum amount to make up the difference between the rate you were paying and what you should have been paying had you been honest when taking out your policy
  • You could be considered as acting fraudulently and you could face legal actions
  • You may find it more difficult to get insurance in the future

Of course, just because you’ve suffered with mental health in the past, this certainly doesn’t mean that you cannot get income protection. It just means that you may be considered a higher risk, and your premiums may reflect this. Ultimately though, it will depend on the provider, your individual circumstances and how long ago your mental health issues occurred.

It’s important to note that the law does protect you from disability discrimination, meaning that insurance providers can only lawfully treat you and your application differently on the basis of your mental health issue (for example by refusing to cover you or charging you more) if they have relevant and reliable information about your mental health condition - past or present - and if the way they are treating your application is reasonable and justifiable.

Are there any exclusions?

Income protection does come with exclusions. This generally includes anything self-inflicted such as alcohol and drug misuse, criminal acts, war or cosmetic surgery-related illnesses. The biggest exclusion to be aware of in terms of mental health is anything pre-existing.

This means that if you have previously suffered from a mental health condition prior to taking out an income protection policy, you are unlikely to be covered for this in the future. For example, if you’ve suffered from periods of stress in the past, especially if it’s needed medical intervention, then you may struggle to get stress-related illness covered by income protection.

This works in exactly the same way with physical conditions. If you have a history of severe asthma, for example, you are unlikely to be covered for asthma attacks or other asthma related issues. It’s worth noting that there is no difference in any of the insurance decision-making processes for mental health to those for physical health. The decision-making process is consistent for every medical condition, whether physical or mental.

Mental health can be a really difficult issue to discuss. But don’t worry - LifeSearch are here to make it easier for you. Whether you are struggling to get accepted by an income protection provider because of your mental health, or whether you’re just a bit worried and unsure on how to get started, let us help.

Contact us today on 0800 316 7253 or submit an enquiry.

Let us get to know you and do the hard work for you

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