View more on these topics

Phil Jeynes: Insurers have to be smarter on mental health

Last month, the BBC’s Money Box covered the story of a protection customer who had seen her quoted life and critical illness premium rise by around a third after she disclosed a historic mental health issue.

The woman was taking cover as a parent of young children and had originally chosen an insurer after getting a quote from an online price comparison site.

Once she had been redirected to her chosen life office’s extranet, she made a disclosure of post-natal depression, which affects about one in five women according to mental health charity Mind, resulting in the hike to the standard rate.

The customer made the decision to reduce the amount of cover she was applying for, rather than pay the increased cost, leaving her family with less protection than she had hoped to provide. This example highlights three key areas which need our focused attention:

  1. We need to talk about mental health issues in a more nuanced way. Around a quarter of adults will experience some form of mental health issue each year and charities have worked hard in recent times to encourage people to talk about them. Many of our underwriting questions, however, remain behind the curve. Most applications ask whether applicants have had mental health issues, stress, depression or anxiety. Can you think of anyone who could honestly answer no? In modern parlance this is like asking whether customers have stubbed their toe. Let’s be smarter about telling customers what we need to know and why we want to know it.
  2. Underwriting mental health issues needs to be less blunt. Having accepted that we all suffer from time to time, some more seriously than others, we need to use sensible questions, coupled with fair decision-making. Loading by 30 per cent for an isolated incidence of PND seems draconian. As the complainant said, she would be happy for someone to explain why it is fair.
  3. We must allow health disclosures before we show prices. Most intermediaries, be they online or telephonic, still give a price before underwriting has been applied. This is outdated and misleading. Had the customer in the Money Box example disclosed her PND at outset, she would have seen the real prices from a range of insurers, not all of whom would have applied the loading her chosen company did. She would have ended up with more cover for her family.

On the programme, our industry was defended valiantly by one of its leading lights, Scottish Widows’ Johnny Timpson, who along with the Association of British Insurers made the excellent point that specialist protection brokers can help clients search out the right cover and can guide them in navigating the various underwriting approaches of multiple insurers.

This is good advice, but we can do more to avoid repeats of this type of problem and to show that we are more in tune with the public we aim to protect.

Phil Jeynes is head of sales and marketing at UnderwriteMe



How a little known change to top-slicing relief could affect clients

When it comes to clients with investment bonds, advisers have several techniques up their sleeves to avoid unnecessary taxation and charging. But one of these tactics has become slightly less productive for offshore bonds in certain situations thanks to a little known change to top-slicing relief by HM Revenue & Customs which went under the […]


Steve Webb: Where longevity conversations go wrong

In a world of pension freedoms, longevity risk falls on the individual. Clients must realise they will likely live longer than they think Mortality is not the nicest topic of conversation, but there is plenty of evidence that if clients do not have a realistic picture of how long they are likely to live, they […]


Selectapension’s DB transfer arm winds up

Provider Selectapension’s subsidiary arm that executed defined benefit advice has been wound up according to a notice published by The Gazette. The update says Selectapension Bureau Services went into liquidation in October last year with Crowe U.K appointed as liquidators. The notice marks the end of Selectapension’s decision to pull out of the DB transfers […]


May: No Brexit could cause ‘catastrophic harm’ to politics

The prime minister is to warn that politics will suffer “catastrophic harm” if the Brexit referendum result is not implemented, reports say. In a speech to factory workers in Stoke-on-Trent later today, Theresa May will say: “As we have seen over the last few weeks, there are some in Westminster who would wish to delay or […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Another example where the blunt instrument of “simplicity” can lead to hollowing out of cover insofar as people end up less well covered than they ought to be in ways that don’t stand up well to scrutiny.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm