Income protection and mental health
Employment and mental illness
Mental health used to be stigmatised. People suffering from it tended to keep it secret. There were several reasons for this reluctance – a sense of weakness or personal failure, embarrassment, a fear of being gossiped about. Talking about mental health problems in the workplace seemed to be very risky. How would employers and colleagues react? Would your job even be safe?
Fortunately, attitudes have changed. Today there’s much greater understanding of mental illness – what it is, where it comes from, how it affects sufferers and how it can be treated. Employers put great emphasis on the emotional and mental well-being of their employees. They know that mental illness, in whatever form, can happen to anyone – it’s no longer something to be ignored or swept into a corner. Income protection insurance provides financial support if illness or injury stops you from working, so, can you claim income protection for mental health issues?
What are mental health conditions?
1 in 4 adults experience mental illness at some time in their lives, but what do we mean by the term? It appears in so many forms, some of them clearly diagnosable and others not so easily identified. Let’s take a look at the main categories.
Depression
People often casually call themselves depressed because they’re feeling unhappy, which is fair enough. However, clinical depression (also known as major depression, and major depressive disorder) is very different. It’s a condition that certainly involves feeling unhappy but it goes much deeper. Low self-esteem, physical inertia, the inability to take pleasure in anything, feelings of immense hopelessness – these are common symptoms of depression. At its most extreme it can lead to suicidal thoughts.
Depression can be caused by life experiences or by internal chemical imbalances and the causes can influence the treatments, which include medication and counselling. Whatever the reasons, someone suffering from depression may find it impossible to work.
Stress
Most of us feel stressed sometimes, at work and at home. Some people thrive on it, feeling motivated and driven by it. But sometimes it can be overwhelming and has a major effect on our behaviour and ability to cope with otherwise ordinary tasks. Its symptoms can be both physical – headaches, muscle and chest pain, dizziness – and mental – lack of concentration, constant worry, feeling overwhelmed. Most cases of extreme stress are treated with talking therapies.
Anxiety
Anxiety disorders are characterised by feelings of fear and dread that are out of proportion to the sufferer’s situation. It’s common for people with anxiety to experience panic attacks in which symptoms like racing heartbeat, breathing difficulties, nausea, sweating and trembling convince the sufferer they’re going to pass out or even die.
Burnout
Burnout is recognised by the World Health Organisation as an ‘occupational phenomenon’ and refers specifically to the experience of people who have been subjected to long-term stress at work and now feel physically, mentally and emotionally exhausted.
Post-traumatic stress disorder
Originally identified in people on active military service and survivors of accidents and disasters, PTSD is now known to affect people who have experienced or even witnessed stressful or terrifying events. Symptoms include flashbacks, nightmares and severe anxiety.
Bi-polar disorder
Know in the past as ‘manic depression’ bi-polar disorder is an illness in which the sufferer experiences mood swings so extreme that they can move from the deepest depression to the most manic and even psychotic behaviour.
This is by no means an exhaustive list of mental health conditions, but they’re among the most frequently cited reasons for being unable to work.
Does income protection cover mental health?
The insurance industry has kept pace with the World Health Organisation and other authoritative bodies. It has long recognised the part it can play in helping people who suffer with mental illness, so income protection insurance for mental health is now part of most policies.
A round-up of the biggest insurance providers in the UK reveals that between 10% and 27% of all income protection claims are for absences caused by mental health conditions. In 2022-2023 it’s believed that 17 million working days were lost through depression, stress and anxiety.
It’s important to understand that income protection policies insure your ability to earn, not your health. That means you can make a claim as long as, in the opinion of a healthcare professional you are unable to work. You don’t need a specific diagnosis, which is particularly helpful in the field of mental health, where similar symptoms can occur in different conditions. Its effect on you is what matters.
What to look for in an income protection policy
Several elements in an income protection insurance policy can have implications for mental health cover. They’re important to understand before you buy a policy, because they may influence your choice. You may find it helpful to see how these issues are covered in an Eleos policy.
Definition of incapacity
The reasons for which your inability to work will allow you to claim should include explicit reference to mental illness and injury.
Pre-existing conditions
Most insurers won’t cover you for conditions you’re already suffering when you take out income protection. Many will only exclude conditions which you’ve experienced in the past few years, so look for policies that have the shortest possible cut-off.
Family history
You may be asked if any members of your family have suffered mental illness so you need to be honest about it. Unless it’s affected you personally then your answer will usually only be used to assess risk and won’t necessarily disqualify you from getting insured.
Requirement for treatment
Some policies may qualify their provision for mental illness by imposing an obligation to undergo certain treatments. These can be very helpful, but sometimes you might feel the responsibility they place on you is unreasonable.
Standard exclusions
Insurers use standard exclusions as a basis for minimising their risk and an income protection mental health exclusion is not uncommon. Standard exclusions tend to be similar across all providers but may not always be identical, so look out for any clauses that might limit your cover for mental illness.
Personal exclusions
These are added to your policy as a result of the information you’ve given. If an insurer decides you’re at higher risk of suffering mental health problems – based on either your own or your family’s history – they may exclude certain conditions. This is true of physical illness as well. Look for a policy which gives you the opportunity to ask for a review of your personal exclusions after a specified time. This could mean the exclusion will be lifted in the future.
Mental health support
Many income protection insurance policies are designed to give more than just financial support. Quite often they’ll offer help with recovery and rehabilitation after physical injury and they may also provide services to treat mental health conditions, such as counselling, therapy and well-being apps.
Is income protection insurance for mental health issues worth it?
Mental illness is treated by insurers with the same seriousness as physical illness or injury. The volume of claims is clear evidence of this. If you’re undecided about the value of income protection insurance, because you fear that mental health conditions may not be covered, there’s every reason to feel reassured.
FAQs
It’s usually a condition of an income protection policy that the insurer has the right to consult your doctor about your present and past health. This can include any instances of mental illness. All the information supplied by your doctor is treated in confidence and your privacy is respected under data protection rules.
When you apply for insurance, you should answer all the questions you are asked accurately and fully. If you hold anything back that later comes to light your insurer may not pay out on a claim and could cancel your policy.
If you don’t feel you’ve had an adequate explanation for the rejection then you should ask the insurer to tell you the precise grounds on which they’ve based their decision. If you’re still not happy you can contact Citizens Advice for help and also complain formally using the insurer’s complaints procedure. If that doesn’t help you can complain to the Financial Ombudsman Service. Their decision is binding on the insurer.
As with claims relating to physical illness and injury, your insurer will need confirmation from a medical professional that your mental illness prevents you from working. They will also need evidence of your current income – in the form of payslips or bank statements - and proof that you have lost it, which your employer can provide. If you’re self-employed your accounts, invoices and receipts should show this.
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