Chris Lees, Senior Research Officer, Money and Mental Health Policy Institute

Our new best practice guide: what insurers can do to support customers with mental health problems

29 March 2023

Most of us will try to buy insurance at some point in our lives. Sometimes this can be because it’s a legal requirement, but often we want to know that we and our families will have some kind of financial protection if something goes wrong. But insurance is complicated. There are lots of different providers offering different products and levels of cover. And what do all the words and phrases mean – excess, no claims discount, whole of life? If you’re struggling with your mental health, navigating the insurance market to find the right cover can be nearly impossible. 

This was one of the issues we found in our recent report, Written off?. We also heard from our Research Community – a group of nearly 5,000 people with lived experience of mental health problems – how it can be distressing to answer questions about mental health histories when applying for insurance. Other challenges included finding it difficult to make a claim and being reluctant to tell providers about mental health problems, for fear of higher prices or unfair treatment. But Research Community members also told us about the difference a supportive insurer could make to someone’s wellbeing. 

So we decided to create a best practice guide for insurers to best support customers who have mental health problems so they can access and use insurance. While some of our recommendations are specific to travel, life and income protection insurance, others apply more broadly to insurers providing a range of different products, including home and motor insurance.

Supporting people trying to buy insurance

For some types of insurance, like travel and life, firms ask questions about people’s mental health history, so the insurer can assess risk. This can lead to someone getting a higher premium, exclusion for a mental health condition or being declined completely. Such outcomes can cause low levels of trust and prompt people to not tell an insurer about their mental health problem.

“There seems little point in telling them. If you disclose conditions they increase the price AND say anything resulting from the condition or needed to manage the condition is exempt.” Expert by experience

We think insurers could help make answering mental health questions a better experience: firstly, by explaining why such questions are being asked. And secondly, by making sure the questions are relevant and easy to answer. Insurers should also explain how a decision like an increased premium was made and make any exclusions related to mental health clear during the customer journey. 

More broadly across the sector, insurers should make sure key documents like terms and conditions are as simple and easy to read as possible. Consumer understanding is a key outcome the Financial Conduct Authority – the regulator for the insurance industry – wants to see from its new Consumer Duty.

“I can’t read terms and conditions as they’re too long and complex so I have to trust the companies.” Expert by experience

Helping people get the support they need

Mental health problems can affect us in a range of different ways. They can make it harder to use communication channels like the phone and affect  how we process information and fill out forms. However, people can be reluctant to tell their insurance provider about their mental health problems and the challenges they are facing in accessing their services, including struggling to pay monthly premiums. This can often be because they are worried about how the insurer will use that information, even if it means not getting the support they might need. 

To better support customers who are struggling with their mental health, we think insurers should have more than one channel to get in touch and to train frontline staff to deal with any disclosures.

“Some companies have specialist teams to speak with people who have poor mental health. This is a godsend for me as I get extremely anxious using the phone when unwell. I am happy to see that online “chat” is prevalent on many sites now and this eliminates the pressure on the telephone for me.” Expert by experience

Additionally, we think insurers should be making sure there is support for customers in difficult circumstances, like needing to make a claim or missing monthly payments. The claims process should be straightforward and customers should feel supported throughout. And insurance companies should  make sure that they are sending out supportive communications that tell customers about the help that is available if they can’t pay their premiums. This is particularly important in the current cost of living crisis.

“They were wonderful. They let me do almost all communication by email, gave me options about how to pay the repair person, and were honestly the difference between me getting through a very stressful situation and me accepting I can’t live independently.” Expert by experience

Moving forward

This best practice guide is part of an ongoing conversation we want to have with insurers about how they can best support their customers with mental health problems. 

You can read our report Written off? and our best practice guide here. If you would like to explore how we could work together, please get in touch with our Head of Strategic Partnerships, Rosie Normanton at [email protected].