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Last updated:
10/07/2020

What insurance might I need if I have a mental health condition?

  1. Mental health and insurance cover
  2. What insurance might I need if I have a mental health condition?
  3. Finding the right insurance cover
  4. Specialist insurance providers for pre-existing mental health conditions
  5. Insurance and mental health rights
  6. Insurance decision complaint
  7. Advice for insurance professionals

There are several types of insurance which provide you cover for specific situations. We explain the most common insurance options and why you may consider taking them out if you have a mental health condition.

A mental health condition can make it more difficult for you to get insurance cover, and you may have to pay more because of a pre-existing medical condition.

You could also pay a higher premium for insurance even if you haven't got a diagnosis but have seen a doctor because you had symptoms of a mental health condition previously.

Once you have decided the insurance types you want to apply for you should read our guide on how to find the right insurance cover with a mental health condition?

Life insurance and mental health

Life insurance will help your family financially if you die during the policy and would be paid either a lump sum or smaller payments over some time.

You can get two types of life insurance cover:

  • Term insurance - This will cover you for a specific period.
  • Whole life insurance - This will cover you until you die.

Not everyone will need life insurance, but if you have people who depend on you financially, and they would struggle if you passed away, you may want to think about it.

If you work, you should also check to see if your employer offers death in service benefit before taking out life insurance. If they do provide this benefit, you may not need life insurance while working for them as they will pay out a lump sum if you die. But you should check how much they will pay out and if this will be enough for your loved ones if you did pass away.

Life insurance premiums - the amount you pay - can be affected by any pre-existing diagnosis that you have, or that you have had in the past.

So if you apply for life insurance with a mental health condition, you may have to pay more than people who do not have any health conditions.

The insurer calculates your life insurance premium during the underwriting process by measuring how and when you are likely to die.

You may also have specific things omitted from your life insurance. For example, this could include death from alcohol or drug misuse, whereby if you died through these means your insurance policy would be void.

Similarly, suicide may be excluded from the first couple of years after taking out a life insurance policy but can be covered after that.

Example: Sam's increased life insurance premium because of his bipolar disorder

Sam was diagnosed with bipolar disorder when he was 18. He is now 33 and manages his condition very well with medication and therapy.

Sam got married to Annie three years ago, they own a house together and pay a mortgage each month which they split between them.

Sam is considering the future and what would happen if he or Annie passes away, and realises they would struggle to pay the mortgage and other bills if they were a one-income household.

Sam and Annie look at life insurance policies and get some quotes from different companies. Sam notices that his premium is higher than Annie's.

The insurance company explains that this is because they have studies that show that there is an increased risk that people with bipolar disorder die at an earlier age.

Sam completes a budget sheet of his income and expenditure and sees that he can afford life insurance even with the higher premium.

So Sam and Annie both agree to take out the life insurance policies, which gives them both peace of mind that the other one will be able to pay the bills if one of them passes away.

Health insurance and mental health

Health insurance - also known as private medical care - offers a way for you to pay for some or all of the individual treatment you require if you become unwell.

Health insurance enables faster access to treatment through quick diagnosis and reduced waiting times when compared to the NHS.

Most health insurance offers mental health care coverage which may include:

  • Quick mental health assessments.
  • A dedicated case manager.
  • A tailored treatment plan.
  • Mental health support groups.
  • Rehabilitation services to help you with your mental health if you need to take time off from work.

You will have to declare any pre-existing medical conditions if you take out health insurance. Most health insurance policies do not cover you for pre-existing conditions - read more about insurance and pre-existing mental health conditions.

Sometimes you can get a policy that covers your pre-existing condition. Still, you will have to pay a higher premium. Health insurance can also include an excess, which means you have to pay for the first part of any cost of private medical care.

Health insurance may also only cover acute conditions rather than chronic conditions:

  • Acute conditions are illnesses that respond quickly to treatment, and you are expected to recover from on completion of your treatment. For example, a first-time episode of psychosis. But not everyone fully recovers from this.
  • Chronic conditions are illnesses that require long-term monitoring, rehabilitation or that do not always respond to treatment, such as schizophrenia.

Health insurance companies use two types of underwriting when deciding your insurance premiums:

  • Full medical underwriting.
  • Moratorium underwriting.

Full medical underwriting means that you tell the insurer about your medical history. They may also contact your healthcare professionals if you agree.

Moratorium underwriting excludes all pre-existing conditions from the last five years for a set period, usually two years, but may then include them after that.

10 questions to ask health insurance companies if you have a mental health condition

Before purchasing health insurance, you should ask any potential insurer the following questions:

  1. Does my health insurance plan cover mental health out-patient therapies or consultant sessions?
  2. Is there a cost limit per treatment session?
  3. Does my GP need to approve access to a consultant or out-patient therapies?
  4. Do you need to approve any appointment I make to see a mental health professional?
  5. What mental health providers are there in my area?
  6. Are psychiatric medications covered under my plan?
  7. What mental health services doesn't my policy cover?
  8. Does my policy include self-help and guided online therapy access?
  9. How many days do I receive in-patient / day-case mental health treatment per year?
  10. Does my insurance policy come with a counselling support service or specialist support services?

Example: How Jamal's employee health insurance helped him recover from PTSD

Jamal lives with long-term depression but has health insurance through his employer. On his way home from work, he witnesses a car accident. In the days following the accident, he has repeated flashbacks and regular panic attacks.

Concerned Jamal goes to his GP who thinks he might have post-traumatic stress disorder (PTSD) and wants to refer him to an NHS psychiatrist. 

The waiting time to see the psychiatrist with the NHS is 12 weeks. Jamal speaks to his employer's health insurance provider who takes details of his medical history, including depression. 

They agree that if Jamal has PTSD, this is a new illness. They arrange for him to speak to a private psychiatrist the next day, who diagnoses Jamal with PTSD. 

The psychiatrist recommends a course of treatment including medication, talking therapy and eye movement desensitisation and reprocessing therapy (EMDR). Jamal completes the treatment recommended and after ten weeks has made a recovery.

Income protection insurance and mental health

Income protection is an insurance policy that will pay a tax-free monthly income while you are unable to work. It can cover situations such as:

  • Losing your job due to redundancy.
  • Being unable to work due to physical or mental illness or injury.
  • A significant reduction in your salary.

An income protection policy will usually:

  • Replace part of your income.
  • Payout until you can work again, retire, die or the end of the policy term.
  • Only pay out when other policies stop protecting you, such as company sick pay.
  • Will allow you to claim as many times as you need to.

When applying for income protection insurance, you will need to declare any current mental illnesses you have. Your policy may include an option where you can get help for your mental health if this is the reason you are out of work.

You may want to consider income protection if you:

  • Are self-employed.
  • Don't get employee sick pay.
  • Don't have savings.
  • Don't have people who can support you.
  • Couldn't pay your bills through government benefits.
  • Are in the process of changing jobs.

Example: How Income Protection helped Sian after a bereavement triggered depression

Sian - a self-employed plasterer - has always experienced depression and anxiety, but it does not prevent her from working.

Sian knows she would struggle to pay her household bills if she was unable to work, so she has income protection insurance.

Sian's father dies, which triggers depression and impacts her life much worse than it has previously. Because of this, she is unable to work.

Sian contacts her insurer, and they pay her a monthly income to cover her living expenses while she is recovering. They also refer her to see a counsellor.

Sian's counsellor supports her through the grief, and she can manage depression the same way she was previously, allowing her to return to work.

Travel insurance and mental health

Travel insurance covers the cost of any medical treatment you may need when travelling abroad, or in some cases beforehand. Travel insurance might protect you if you have a mental health condition and:

  • You become ill while you are abroad and have to pay medical expenses.
  • You have to cancel your trip before travelling because you are unwell.
  • Your journey gets cancelled, for example, if your travel company goes bust.
  • Your flight is delayed.

There are several travel insurance policies, and each covers different things. Before you buy travel insurance, you should think carefully about what type of cover you need.

There may also be an excess on your travel insurance. This is where you pay for the initial amount of the claim. Usually, the higher excess you have to pay, the cheaper the travel insurance.

Applying for travel insurance with a mental health condition can affect how much it costs, and may include some exclusions to the policy. It is also unlikely you will get travel insurance if your doctor has advised you not to travel.

You should consider the following questions before deciding which travel insurance to get if you have a mental health condition:

  • Do I need a policy that allows me to cancel if my mental health gets worse?
  • Does my policy cover me for treatment of my mental illness while I'm on holiday?
  • If not, could I afford to pay for medical treatment while I am away?
  • Will my policy arrange for my travel home if I get ill?

 

Example: How travel insurance helped Tara and her family when she experienced psychosis on holiday in the Caribbean

Tara lives with schizophrenia. She went on holiday to the Caribbean with her family, but while she was there, she started to experience psychosis.

Tara's family contacted the insurance company who arranged medical care for her locally. However, Tara's insurance company was worried that the standard of care was not acceptable.

The insurance company arranged for her to fly by air ambulance to Florida, and arranged for her family to travel by plane.

After a stay in the Florida hospital, Tara's doctors recommended that she would need long-term care at home, and flew back to the UK.

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Within this subject

  1. Mental health and insurance cover
  2. What insurance might I need if I have a mental health condition?
  3. Finding the right insurance cover
  4. Specialist insurance providers for pre-existing mental health conditions
  5. Insurance and mental health rights
  6. Insurance decision complaint
  7. Advice for insurance professionals
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