A risk adviser has highlighted the importance of life insurance companies treating every client mental health claim as unique and assessing it on its own merits.
Fitzpatrick Financial Services specialist life insurance adviser Ben Day says clients with mental health issues, for example, are rarely told to stop working long-term, contrary to popular belief.
“I’ve spoken to mental health professionals who have said the last thing the vast majority of clients want is long periods off work,” Mr Day told Risk Adviser.
“Sitting at home often makes depression and mental health worse, and insurers need to understand this and not treat every claim the same.”
Mr Day said this should also apply in the underwriting process.
“A simple phone call by the underwriter to the client to discuss their issues could help greatly and enable the underwriter to get a clearer understanding from the client’s perspective,” he said.
Mr Day acknowledged that some insurance companies are considerate and will review applications on a case-by-case basis, treating the claims based on severity and individual circumstances.
But he said some companies have a blanket approach with no flexibility or consideration.
“An example is just before Christmas last year, where one of my clients had a full decline applied to all cover due to a client recently going on a mental health plan,” Mr Day said.
“The mental health issue was very mild, so I referred it to another insurer who approved all cover with a mental health exclusion on TPD and income protection only, with a promise to review the exclusion in two years, which was fair.”
This story is part of a feature on insurer mental health claims to be published in the May edition of ifa magazine.