Let’s Talk ‘Mental Health, Mortgages and Protection’

As many of you may be aware, Mental Health Awareness Week runs from 15th – 21st May this year. According to Mind, one in four people in England will experience a mental health issue. Depression, anxiety, schizophrenia, bipolar disorder and phobias are just some mental health conditions that can have a significant effect on our wellbeing, behaviour and mood.

There are quite a few ways we can tackle a blog on this. I am going to look at two; mental health in protection and how we as brokers deal with vulnerable clients.

Mental Health in Protection

Please note that when I speak about protection in general, I mean Life Insurance, Critical Illness Cover, Income Protection and Accident Cover.

Could it be that you, a family member or friend would like to submit a new application for protection and have had mental health issues in past?

Having a pre-existing condition is certainly not a total roadblock for getting cover. It could be that your application is referred to the underwriters and the underwriters then place a request for further information in the form of a medical report from your doctors surgery. You would have the choice to give your consent to this going ahead.

Decisions may then vary and will be based on the nature of the condition and your most recent medical history. Some outcomes many potentially have omissions on conditions, because normally health insurance exists for new or unexpected medical issues that develop after the policy has started. However, it would be worth working with an experienced broker to help navigate this. Never omit a disclosure or answer incorrectly on any medical question as this will invalidate your insurance.

Do you have personal protection in place already and are now suffering from mental illness?

If so, now may be the time to find those policy condition documents. Some Income Protection providers do include and pay out claims to customers with many types of illness and injury, which does include mental health as standard. In some cases, payment for treatment is a possibility too. However, others have specific mental health conditions as a financial add on.

Insurers can also offer a range of additional benefits to clients too – specifically when it comes to your Life Insurance and Critical Illness policies and the provider you chose. This could include helplines, online resources, general and preventative measures and these often come at no extra cost. You can start using them as soon as you take out the policy as an extra support. They are a great way to look after your general wellbeing and potentially stop problems growing or taking root in the first place.

But it is vital you take the time to read and understand what you are covered for or speak with an advisor who can go through everything with you.

Vulnerable Clients

When it comes to vulnerable clients, we should start with ‘What is a vulnerable customer?’. The Financial Conduct Authority define them as ‘someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care.’

Vulnerability can be permanent, temporary, situational or sporadic and actually it may surprise you as to who is classed as vulnerable in this industry, as some people may not even recognise themselves as ‘vulnerable’.

Vulnerability can include a whole range of areas including the following:

  • mental capacity deficiencies (including language or communication)
  • mental illness and dementia
  • a physical impairment
  • clients with severe or long term illness
  • people with lack of financial knowledge
  • individuals with low income
  • those who are carers
  • those with a lack of access to the internet
  • if a client is aged over 75 years or under 18 years we also have to treat them as vulnerable
  • customers who appear to be under immense stress, whatever the source: bereavement, employment, relationship difficulties.

If you are noted as being vulnerable, what can you as a client expect from the industry, does it change anything?

It is clear in the rules laid out by the FCA and the Equality Act 2010 that the industry is not allowed to discriminate against clients in vulnerable circumstances in regard to charging higher fees or refusing to help because of the customers circumstances. However, as a requirement under the FCA we have to be suitably trained to identify some potentially vulnerable areas. We have to understand the potential issue, the risk and then provide a solution for the client.

Any broker registered with the FCA should be familiar with their company’s Vulnerability Policy and Procedures and spot where sign-posting to other agencies may be required. Personally, I am certified in Mental Health First Aid at Level 2. I believe this is vital in the role that we hold in the Financial Services and something I would hope to see as mandatory in the coming years.

For support with any mental health queries, please do visit https://www.nhs.uk/nhs-services/mental-health-services

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