How do insurers assess mental health?
In honour of R U OK day we thought we might share some insight with you for Friday afternoon. The last few years has placed great strain on everyone and this has been especially pronounced in the healthcare system and the Doctors that work within it. Lets walk through how underwriters assess mental health when Doctors apply for Income Protection Insurance or other Life Insurance products.
I was reading an article written by Dr John Cummins recently and thought to myself “Do my clients know that more than half of the insurance applications I do have some form of mental health disclosure?” is the stigma of mental health treatment as prevalent as it always was?
Let me make it clear that I am not medically trained and even though a did a couple of basic units of Psychology at University am am in no way qualified to understand the nuances of mental health conditions and their treatment.
I am however very experienced in how insurance underwriters assess risk and have taken a very keen interest in how mental health is assessed for many years now. This is very relevant to Doctors who, while their job may or may not be extremely demanding in a physical sense, often work under significant mental strain as they literally make life or death decisions on a daily basis and work in a very competitive environment.
Look after yourself first!!!
Occasionally I am asked “I’ve been thinking about seeing someone but I’m worried it will affect my insurance cover in the future”. I will respond to this in the same unequivocal manner every single time. If you feel like you are in poor health, physically or mentally, your ability to obtain insurance cover in the future should be the absolute last thing on your mind. Look after yourself first!!! The purpose of any type of Insurance is not to be profitable or a windfall. It is simply a safety net that protects you if something significant happens to you. The goal is always to live a healthy and productive life and no amount of cover is going to replace that. Early diagnosis and treatment of any condition decreases the likelihood this will become a significant problem that leads to any claim.
How do insurers assess mental health risk?
An insurance company operates under a pretty simple basis. They need to assess in advance how many claims they will have and ensure they have enough funding (clients paying premiums and return on capital pool) to meet this cost, with a reasonable profit margin. You can start with population risk (the probability that X number in 100 will get Y condition that would lead to a claim) and then create subsets based on each profession and age and gender. It might sound simple but there are gargantuan amounts of data that go into this process as the insurer is literally trying to predict the future. Ultimately, this is how the premiums are derived for “standard lives” that match the terms of the insurance contract in the PDS. The underwriting process assesses if the applicant is a standard life or if they are more risky. If it is determined that they are more risky the insurance can either add additional cost (known as a “loading”), exclude the specific condition or remove risk completely by declining cover entirely.
As medical professionals are trained to look for signs of ill health, mental or otherwise, and have easy access to diagnosis facilities they often go looking for things that most of the population would not even consider. This means they often have highly complex cases that need to be considered in the right context. As I said, I am not an underwriter and I am not medically trained. This is simply my interpretation of how an insurance company will assess risk the risk of a mental health claim in based on my own professional experience. I don’t get access to underwriting guidelines and databases but these themes are common.
There is no treatment without diagnosis
If you are seeing a psychologist or taking medication prescribed to treat a condition it is assumed there is an underlying condition. Quite often a formal “diagnosis” has not been made but there is still a history of treatment this is where discretion and expertise comes in.
Example: Workplace counselling is offered by your employer. You accept and have a few sessions with a psychologist and talk about your work and chat about your partner not packing the dishwasher correctly and you consequently yelling at them after a hard day. They discuss your support network and help you build your mental health toolkit. You wish each other well and off you go feeling better about getting a few things off your chest.Yes you have “ticked the box” that says you have seen a psychologist but does this mean you are a higher risk? Skilled underwriters look at each case and are always up for a discussion around context and often this is put aside.
Is this a reasonable reaction?
If you have ever has the displeasure of losing a loved one or a relationship breakdown you will know that this isn’t something you shake off and head to work the next day fresh as a daisy. Reaching out for help from your GP or other avenues is not only reasonable but is a far healthier option than ignoring a problem until you are no longer able to function at all. The additional risk comes when there is no apparent external “trigger”. If you are seeking treatment with no know cause this could simply be a chemical imbalance or some other internal issue that means you appear to be higher risk than the population.
Example: Your parent passes away unexpectedly and you take a couple weeks off work and see a psychologist for 6 months with no medication.
This is clear trigger but the treatment is not a “one off” as it ran for 6 months. Typically speaking if this was more than 2 years ago its unlikely that an exclusion would apply.
Time frames and severity
Was this condition a once off or has it occurred multiple times? Was this simply a low mood and a couple days off feeling stressed out or anxious? Do you need to seek professional help regularly?
Example: You have been studying for years and even crammed for 9 months to study for your final exam. Half way through sitting the computer system crashes and they tell you all to go home and come back in 3 months for the next one. You’ve put your whole life on hold for this and you see your GP to discuss and they diagnose you with generalised anxiety and prescribe you with an antidepressant which you take for 6 months at low dosage. You pass your next exam and you’ve been a fellow now for 6 years with no further treatment.
If it’s been some years since any treatment (5 as a guideline) and this was a short once off time frame, it’s unlikely that an exclusion would apply. The real discretion here is that even though the exam may appear as a trigger and the subsequent treatment a reasonable reaction reasonable this is actually related to the workplace which you operate and is not an external trigger as discussed in point 2 but more an inherent part of your job.
Is treatment effective and stable
The brain is a very complex organ. It’s often very hard to say that one condition did or didn’t lead to another and stress and anxiety is the vast majority of cases that lead to an exclusion as the insurer simply doesn’t know what this might develop to so is assessed based on the first 3 points. However, there are some conditions that can be well treated as a chemical imbalance. ADHD for example can be well treated and with a long standing history showing this it has been possible to obtain cover for full cover for mental health conditions.
Results of an assessment
Once underwriting process is complete and the above points considered the insure will either issue a contract as “standard” or they will offer amended terms. It is very rare for an insurer to use a loading for mental health conditions but very common for them to exclude mental health claims entirely. Other than severe cases that might include suicide attempts or other significant risk factors it’s not often a case is fully declined based on a mental health issue alone.
As we specialise in providing advice on insurance for Doctors we take the time to carefully understand each case so we can frame a case for the insurance underwriter. If you are ticking boxes online or being sent to the insurer for a “tele-interview” it’s unlikely this will information will come to light until much later and this can slow the whole process down with a lot of back and forth. While we don’t relish the thought of discussing some of the hardest times in our clients lives this is relevant to your case and we are your advocate throughout this process. After all, when we set up insurance cover we are putting in a place a worst case scenario plan that, if done well, greatly reduces the burden at what may be one of the hardest times in your life.