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Insurance Business | 28 Nov 2016, 09:00 a.m. Agree 0
Approach by insurers comes under fire… but is the criticism valid?
  • J-P Hale | 28 Nov 2016, 09:52 a.m. Agree 0
    On the whole the industry seems quite bi-polar in its approach and this creates all manner of misunderstanding and challenge for the retail consumer of insurance policies.

    Consumers do not understand the different approaches underwriting have for general insurance, life insurance, disability insurance, and travel insurance. They often look at it as all being much the same thing.

    Insurers tend to be very harsh when it comes to arranging cover when there has been some sign of mental health challenge in a consumers past. However, if there is unencumbered cover, my experience has been insurers take a very proactive approach to engaging the right answers and support for clients at claim time.

    It's this very black and white approach that confuses consumers. In the vein of how can they be so good at claim time when they are so harsh at underwriting. We need to find a happy medium to enable consumers to move and acquire coverage for mental health conditions where there has been some level of stress or depression history in their past.

    Many clients who have gone through a claim for mental health are often in a better place than when they first took cover, the situational issues and their responses to issues of life are often far superior after intervention than they were prior. This should be seen as an improved risk rather than an increased risk. In the same way that insurers now look at cholesterol and blood pressure for clients. It used to be medication for these conditions was loadings and exclusions across the board. Now it often is seen as standard or borderline risks and far less likely to have exclusions.

    Personally, I want to see a sustainable healthy insurance market and I understand mental health has a significant impact when it comes to income protection. A loaded approach rather than an exclusion approach needs to be considered where a client is able to demonstrate they have been compliant with their medical treatment for a mental health condition and this has resulted in an improved outcome and life experience, If this is applied in the window 3-5 years post recovery and treatment it could be workable.

    Yes in certain situations, this isn't going to work and will always come with an exclusion. However, for the majority of situations where it is a 1 off anxiety or depression event the current answers are far too tough.

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