Insurers pledge to support mental health sufferers with clearer language in policies

Insurance companies have unveiled plans to revamp their approach to customers suffering with mental health problems.   This follows concerns that insurers were incentivising customers to omit mental health conditions from applications by charging much higher premiums to customers declaring everyday stress. There were also fears that online application processes were too […]

Insurance companies have unveiled plans to revamp their approach to customers suffering with mental health problems.  

This follows concerns that insurers were incentivising customers to omit mental health conditions from applications by charging much higher premiums to customers declaring everyday stress. There were also fears that online application processes were too complicated for many to understand.

The Association of British Insurers, a trade body, admitted that the sector needed to do more to support customers with mental health issues. 

New industry standards, developed in association with the Mental Health UK charity and the Royal College of Psychiatrists, will standardise the language used on application forms and in other communications to make it simpler for customers to understand. 

During the application process, customers will be told why certain questions are being asked and technical terms will be better explained.

Applicants will also be given the choice of how they want their insurer to interact with them, avoiding potentially distressing letters being received in the post. Insurers have until Dec 31 2021 to implement the new industry standards. 

Research by Mental Health UK found that 86pc of people affected by mental illness did not know how to access independent advice when applying for insurance cover.

A Telegraph Money report in August found that insurers often offered higher premiums to customers who had declared minor stress and anxiety. Experts warned that this encouraged people to lie on their applications for fear of higher premiums.

However, those who fail to declare existing conditions on insurance policies can forfeit their payout. 

Sarah Murphy, of Mental Health UK, said: “Mental illness shouldn’t be a barrier that prevents anyone getting the insurance they need. 

“Our research found that applying for insurance has often been a difficult and upsetting process to navigate for people who’ve experienced mental health problems, with over two thirds of people feeling that they’ve experienced discrimination.”

Yvonne Braun, of the ABI, added: “People can find it difficult to navigate the increasingly digitised economy, particularly in financial services. For people with mental health conditions, this can be particularly distressing.”

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