Insurance and living with a mental health condition

Navigating the world of insurance can be a challenging experience – trying to find a policy you can afford, fishing through a sea of providers to try and find one that makes sense for what you need, and finding a policy that is actually tailored to YOUR needs. It can feel like a lot of work to get the peace of mind and financial airbag that insurance is there for.

If you live with a pre-existing mental health condition then getting insurance has additional challenges and it can be more difficult not only to apply for cover but to actually get covered.

The NHS’s latest monthly mental health services statistics reported 1.71 million people were in contact with their mental health services at the end April 2023, with 369,056 new referrals received and 1.8 million care contacts attended in April alone. As NHS statistics, these numbers therefore do not include people who are seeking mental health services privately.

We are feeling the serious impact of the cost of living on our mental health, with 1 in 10 UK adults feeling hopeless about their finances, and over a third of UK adults feeling anxious. With financial stresses damaging our mental health, UK adults are also struggling to engage in things that are known to protect our mental health, with 30% of UK adults having poorer quality sleep, and almost a quarter of us meeting friends less often.

So keeping the debate going on the connection between financial health and mental health is crucially important, as well as raising awareness of the interaction between insurance and mental health.

The mental health charity Mind sets out the additional challenges faced when getting insurance cover with a mental health condition. They explain that some insurers do not cover pre-existing medical conditions, which can include some mental health conditions, and may restrict what they cover in terms of mental health. Also, you could be assessed as ‘high-risk’, potentially leading to a refusal to cover you or a higher premium to pay. You may also be charged more if you cannot work due to your mental health. Some insurers may even raise prices if you declare that you are taking medication or receiving other treatments.

Mind also highlights problems with the application process itself: insurers’ questions are sometimes too broad; the insurance company representative asking you personal questions about your mental health might not have mental health training; and the practicality of filling in the application form itself can be an obstacle.

Fortunately, there are some free helpful guides from mental health and financial experts that provide information and advice on getting insurance with a pre-existing mental health condition.

Mind’s mission is to fight for mental health, and they have a dedicated website page for getting insurance cover when living with a mental health condition. This page covers a lot of helpful information including:

• the challenges you may face when applying for insurance
• what is meant by a ‘pre-existing medical condition’
• how to find the right cover, and what could happen if you need to make a claim on your insurance policy.

Their page can be found here: Mind: Insurance and Mental Health

Mental Health and Money Advice is a UK-wide online advice service designed to help people understand, manage, and improve their financial and mental health. They have a dedicated guide to insurance and mental health. The guide covers information on:

• how a mental health condition can affect your insurance application
• what insurance you might need if you have a mental health condition
• advice on how to find the right cover for your needs
• your rights when applying for insurance with a mental health condition, and
• how to make a complaint about an insurance decision made about your mental health.

It also provides some advice for insurance professionals on working with clients who have a mental health condition.

Their guide can be found here: Insurance and mental health guide and it also includes short video explainers on each part of the guide.

Both guides also provide a list of specialist insurance providers for pre-existing mental health conditions.

Some key takeaways from these expert guides are:

1. Shop around different insurers to get cover for your specific needs at a price that is right for you.
2. Make sure to read the insurance policy thoroughly so you know what you are and are NOT covered for (ask someone to read it through in detail with you if needed).
3. Know your rights when it comes to insurance.
4. Seek help when you need support.
5. Keep evidence of all your dealings with insurance companies in case you need to make a complaint or take legal action in the future.

As providers of GAP insurance, we also want to take this opportunity to inform readers that pre-existing health conditions, including mental health, do not affect a policy or premium for this type of insurance cover.

First of all, what is GAP insurance? GAP insurance is designed to protect you against financial loss if your vehicle has been declared a total loss or write-off by your insurer. If your car is involved in an accident, stolen or damaged by flood or fire, and deemed a total loss, your comprehensive insurer will only pay you market value for your vehicle at the time of the incident. This may leave you exposed to any remaining finance settlement charges or the substantial loss suffered with the vehicle value depreciation. This gap can be covered by purchasing GAP insurance.

When making an application for GAP insurance with us, only basic client information is gathered, such as name, date of birth, and address. No medical history is recorded, nor is it relevant for a policy or the premium. The GAP insurance premium is purely based on the vehicle value, term of cover and type of policy. There shouldn’t be any need for GAP providers to ask you for that information. At ALA, our team has also received training for working with clients who are put at increased risk of experiencing abuse, harm, discrimination, and disadvantage by structural inadequacies.

If you’re looking for more support for your financial and mental health, check out our resources page.