As well as understanding the risk before talking price, insurers are increasingly moving to systems such as UnderwriteMe that will underwrite the applicant before providing a price. This ensures more accurate price comparisons can be made. “Comparing clean prices makes no sense,” says Mr Jeynes. “It is a bit like arranging car insurance without knowing what the vehicle is.”
Moral stance
Ethically, it is also important that the protection industry demonstrates it can offer affordable cover to individuals who have a history of mental health conditions. “One in three people will have a mental health disclosure of some type,” says Mr Knowles.
“If they are concerned that they will be judged, this will stop them disclosing this information or prevent them taking out cover at all.”
As well as making underwriting more transparent for clients with mental health issues, the protection market could also benefit from greater flexibility in its product terms. For example, Mr Roberts says that in many cases an insurer will automatically withdraw features such as guaranteed insurability options from the cover if it is written on a non-standard basis. This prevents the policyholder from increasing cover without further underwriting following life events such as having a child, getting married or increasing the mortgage.
“We have to get away from price and focus on the person as the most important part of the cover,” he adds. “The protection industry has to treat customers with more understanding.”
With the UK benefitting from a more open dialogue around mental health, it is essential that the protection industry adopts the same approach. Ensuring that clients are able to access cover at a fair price, and not penalised for a mental health condition, is essential.
