Tuesday 6 October 2020

5 Things To Know About Life Insurance And Mental Health

Buying life insurance could be one of the smartest decisions you make, especially if someone in your life depends on you financially.

However, if you struggle with mental health then you may face a number of challenges when it comes to the application process and getting the cover you need.

For example, you may have to answer more questions than some other applicants and you may be charged higher premiums (depending on the severity of your condition).

However, with 1 in 4 people in the UK experiencing a mental health problem in their lifetime, many life insurance providers understand the importance of being able to provide cover for a range of applicants with unique circumstances.

At the end of the day, life insurance needs to be accessible to as many people as possible so that more and more families are financially protected if they were to unexpectedly lose a loved one.

So, if you struggle with a mental health condition such as depression or anxiety, and you’re thinking about buying life insurance, here are the top 5 tips from award-winning life insurance broker Reassured

1. You may not be considered ‘high risk’

Despite the challenges, most people with mental health conditions are not considered ‘high risk’ and are able to secure the life insurance they need at a price they can afford.

Life insurance providers assess risk based on how likely you are to make a claim, so if you have mild depression and/or anxiety that is well-managed and has been stable for many years, then it’s unlikely to result in hiked premiums or a declination of your application.

If you have suffered a slightly more serious mental health condition and/or you have previously self-harmed, attempted suicide or been hospitalised then you may be charged a more expensive premium (depending on when this event took place).

Also, every insurer has a different underwriting process (how they measure risk), and factors that may be considered high risk with one insurer, may not be considered high risk with another insurer - which is why it’s important to approach multiple insurers for multiple quotes.

2. Visit a doctor or mental health professional beforehand

Hopefully, you’re already receiving the right treatment and/or medication to help you feel better and manage your symptoms. 
If you haven’t visited a doctor or mental health professional recently, it may be sensible to do this (before applying for life insurance) so that they can assess your current well-being and ensure that your treatment and/or medication is the most up to date and working as it should for you.

Whilst this isn’t compulsory prior to making a life insurance application, it means you’ll be much better prepared to provide the insurer with an up to date and accurate record of your condition.

Why is this necessary?

Firstly, it will ensure that your policy covers your specific circumstances and secondly, if your condition is well-managed, you’ll have a higher chance of securing an affordable premium compared to someone who hasn’t received help for their mental health.

3. Be prepared to answer questions (but don’t worry, these aren’t to judge you)

Every life insurance applicant is asked a standard set of questions regarding their personal circumstances (e.g. age, smoking status, weight etc) to determine the level of risk they may pose to the insurer and to calculate their premiums.

Someone with a mental health condition may need to provide a little more information specific to their condition.

The insurer may ask for example, when you were diagnosed, the severity of your symptoms, what treatment you’re receiving and how often you experience the symptoms.

It may be difficult to answer these sensitive questions, particularly to a stranger over the phone, however the insurer isn’t there to judge you or your circumstances – it’s just really important that they get this information correct and arrange the right policy for you.

4. Honesty is the best policy – don’t risk your investment

Whether your mental health condition is diagnosed or not, you may be unsure if it’s necessary to tell the insurer. Well, if the insurer asks if you have any diagnosed pre-existing medical conditions, which includes mental health conditions, then you must tell them.

If you decide not to disclose that you have a mental health condition, in the hope for a cheaper premium, then you could risk a denied pay-out (which would be devastating for your family).

This is because when you pass-away, the insurer has the right to check your medical records and/or investigate the cause of death, and they’d be able to discover a non-disclosure at this time.

That’s why it’s always best to be as honest as possible when applying for life insurance.

5. Save time and money by comparing multiple quotes

The life insurance industry has changed significantly over the years, allowing people from all backgrounds secure the financial protection that they need.

However, some insurers aren’t so accommodating even these days, and may quote you a higher premium based on the fact you have a mental health condition rather than assessing your application on an individual basis.

So how can you identify which is the right insurer for you?

Well, you can do this by shopping around and comparing quotes from as many insurers as possible. And to save time, you could use a specialist life insurance broker to carry out the search on your behalf.

Unlike a comparison site, a life insurance broker is able to match you with an insurer that is most likely to accept your application and provide you with the best possible premium.

It’s sensible to use an FCA registered broker that is free to use, such as Reassured based in the UK.

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