Living with depression or an anxiety disorder doesn't need to stop you from getting your life insurances sorted.
Thankfully, good mental health is now becoming part of the regular conversations for many Australians.
Here are some tips to help navigate the application process.
- About 3 million Australians are living with a form of anxiety or depression (Beyond Blue 2020) and at least 45 per cent of Australians will experience a mental health issue at some point in their lives. (SANE, 2019)
- However, studies have also found that LGBTIQ people face up to twice as much abuse or violence than our heterosexual counterparts and that this prejudice and discrimination adds an additional layer of risk factors that can lead to depression and anxiety.
- Research and real life experiences have found that LGBTIQ people have an increased risk of depression and anxiety, substance abuse, self-harming and suicidal thoughts.
Jump Ahead
Here's the question we get asked a lot
- "If you have a past (or current) mental health condition, how does this affect your ability to get life insurances and set up a safety net for yourself or your family?"
The good news is, if you have a history of mental health issues, it doesn’t need to automatically stop you from getting your life insurances sorted.
- In fact when you have the right information and the right specialty financial adviser on your side, you may be still able to qualify for a range of life insurance policies.
- Just be prepared to first provide more detailed background to your specialist financial adviser so we can help the insurer better understand your individual situation, so they can provide an individual assessment.
There’s no doubt attitudes toward mental health issues are slowly changing for the better as more and more people in our community see the importance of talking about what matters most - our good mental health.
No two peoples' stories are the same
The challenge for many old fashion life insurance companies, taking a one-size-fits-all approach to understanding mental health is not helpful.
Some people who do not have a mental health condition are finding themselves assessed by insurance companies as if they do, while others with well-managed conditions tell us ‘they feel their personal circumstances are being ignored’ as they find themselves in the too-hard-to-insure-basket, with nowhere else to turn.
Do insurance companies pay out on Mental Health related claims?
Absolutely!
Life Insurance companies in Australia paid $1.24 Billion1 (yes that's not a typo, the word is ‘Billion’) in claims payments to more than 9,500 Australian's for mental health claims for 2019.
Where do we start?
First, let's get some clarity on what the diagnosis actually is
Depending upon whether a person is living with a reactive grief event or with a professional diagnosis of depression or anxiety, (or something else) - getting clear on what, why and how to best manage the issue is an important part of getting your story understood by an insurance company.
- Grief and Depression might look initially similar, but they can often have very different triggers.
Some reactive grief-based events can understandably leave us all feeling the mental impact of a sudden, (often surprising) and strained emotional response. Whether that's the sudden death of a parent, an injury to a child, or the loss of siblings or friends - it all takes a toll on us in many different ways.
- Depression and Anxiety can be two separate conditions.
Whatever may be in your life story, understanding your triggers, appreciating their effects and working with the correct diagnoses is very important to getting the best chance at getting your life insurances sorted.
Know what you can expect to be asked about mental health during a life insurance application
Here are seven sample questions you will need to be prepared to answer during a life insurance application.
- Have you ever taken (or been prescribed) any medication for your mental health condition and if so, what are the names and dosages?
- Are you still taking medication and was it prescribed more than once?
- Have you ever been recommended to talk-based therapy such as counseling, CBT or referred to a psychiatrist?
- Have you ever been in hospital for your mental health condition?
- Have other associated health conditions related to mental illness, such as a history of drug or alcohol misuse?
- Have you ever taken time off work as a direct result of your mental health condition?
- Have you ever tried to complete suicide?
Why it's important to disclose your mental health history?
Applying for any Life insurances is part of a good faith application with a legal Duty of Disclosure. This means under the duty of disclosure, a person applying for insurance must disclose all relevant information to the insurer before a contract is entered into.
Failure to fully disclose can allow insurers to not only deny a claim but also to “avoid” the insurance cover, as if it never existed. This means an insurer could refuse to cover any claim under the insurance policy, even if it’s completely unrelated to the matter that was not disclosed.
Pro Tip: Some insurance applications have time limited questions and may ask about a medical history from the past 5 years only, so make sure you understand the question (and timeline) being asked about.
Take all applications for life insurance seriously and only work with a professional financial adviser who can understand your personal circumstances and clearly explain them to the Insurance assessor.
Time for some good news
The good news is there are a few modern life insurance companies who are now more interested in understanding an individual's personal situation to see what level and type of insurance cover they can provide.
There are usually three typical outcomes.
- Sometimes it's straightforward and might take a little more time to assess, as long as we have access to detailed information ahead of time.
- Sometimes it may result in an increase in premiums to cover an increased risk, and
- Sometimes cover might be deferred until particular symptoms have reduced or medication are no longer needed.
- Occasionally we might be unsuccessful in getting insurance cover based upon the current rules and can try again when changes occure.
Either way, we work with all our clients to get clarity on their individual options and if we need to wait, we’ll wait together with you until the right time.
The important message is, Take Action Today
While it's impossible to provide a one-answer-fits-all-insurance-companies statement here - the important message is this:
- Don't ignore an opportunity to get your insurance sorted today, just because you don't yet know all your options.
Give us a call and we can do a confidential pre assessment for you to test the water, before we both jump in together.Drew Browne
[1]Data Source: FSC-KPMG life insurance claims data based upon all income protection mental health claims where the person received a payment during 2014-2018.
