Protection underwriters misjudge mental health risk, says RedArc

Protection underwriters are in danger of over-stating the risk posed by mental health conditions for insurance policies, according to RedArc Nurses. This in turn could lead to individuals facing unnecessary restrictions, exclusions and higher premiums, or potentially being declined protection completely.

Christine Husbands, managing director for RedArc nurses says: “Underwriters are prolific in their question-asking but more attention needs to be paid to understanding the answers. Underwriters are specialists in their field and undergo a lot of training, but by definition they are not specialist mental health clinicians.”

There is a both a rise in the number of people with a diagnosis of some form of mental ill-health, as well as a greater candidness amongst those affected, and therefore more individuals are likely to disclose their condition when applying for insurance.

RedArc specialises in providing long-term practical advice and emotional support tailored to meet the individual needs of those affected by a serious physical or mental health condition, disability, trauma or bereavement. RedArc’s point of view is that anyone has the potential to be affected by a mental health condition – it is often a normal human reaction to a major life event. And many of those who have already experienced an issue tend to be much better at understanding it, identifying triggers, and managing it, and therefore pose a lesser risk to an insurer, not greater. An individual who has never experienced mental health problems may be less aware of the triggers and less able to cope should they be affected.

Christine Husbands said: “We would recommend that underwriters need to work alongside professional, clinically trained, mental health practitioners who are better able to assess an individual based on their answers, and can give an informed view of the risk posed.

“Such a partnership also means they can provide recommendations to help people manage their condition over time. This might include regular touch-base phone calls from the clinical practitioner, using tech to monitor their situation such as with a mood diary and giving the individual easy access to trusted help should they start to feel unwell. Not only does this build a long-term, trusted and supportive relationship between the individual and their insurer, via the clinician, but it is a key component in risk management.

“Many insurers are now building added-value services, such as mental health support, in to their insurance products but they need to be really careful that they are not seen to be giving with one hand and taking away with the other. Many individuals with pre-existing mental health conditions do not pose the risk that underwriters may think they do, and in this respect insurers need to better assess how they interpret customer’s answers by taking guidance from a clinical expert.

“It’s time for underwriters and specialist mental health practitioners work closer together, both the industry and clients will benefit.”