By Dr Dominque Stott, Chief Medical Officer at Liberty
The COVID pandemic and economic upheaval that has taken place over the past couple of years have revealed how important mental health issues are and that they can have very serious consequences for the lives of clients.
It is no surprise then that increasing numbers of people are seeking cover that includes these medical ailments.
Mental health issues are manageable, and there are many options available to help with the recovery process and mitigate the effects of any potential personal, medical or economic issues.
For advisers, having an understanding of how this may affect their clients is key to being able to offer financial solutions that can bring comfort to those who want to protect themselves and their families from financial hardship and possibly a worsening mental health issue.
It is therefore important to understand who is being affected and why.
The bare figures
Liberty saw a spike in mental health claims from its clients during 2021, particularly among working people between 35 and 54 years of age.
According to corporate claims, psychiatric conditions were the second leading claim cause amongst females, making up 8% of all claims among women, with those over the age of 35 being most prone to these conditions.
The statistics show that psychiatry related claims increased significantly for older females as a proportion of total claims.
While men did claim for mental health, the numbers were not significant enough to feature on the top 5 list of claims causes.
The 2021 figures show that Liberty paid out a significant number of claims for conditions like major depression, which accounted for 45% of all mental health claims.
Dementia made up 10% of all mental health claims and it is interesting to note that according to the figures, though more women claimed for dementia than men, the number of policies owned by men are far greater. This does indicate that women are potentially underinsured particularly in this area.
Other causes of mental health claims included disorders such as anxiety, stress and bereavement.
In terms of an overall gender breakdown for these conditions, more claims were paid to women than men. For major depression claims, 3 out of 5 claims were from women.
It is well known that even without the impact of COVID-19, women have a two-fold increased risk of major depression compared to men. There may be hormonal reasons such as pregnancy and menopause, but also social, marital and economic circumstances are considered important factors.
How to approach cover
Many of these claims have been attributed in a large part to the stresses brought on by COVID-19. These may be partly attributable to people having lost loved ones, being retrenched and struggling to get by because of economic upheaval.
From life cover to temporary and permanent disability and impairment insurance, there are numerous options that can protect clients and their families in the event of a mental illness emerging at claim stage.
Provided they meet the requirements of the terms and conditions of their particular policy, they can be covered for a mental illness as for any other type of medical impairment; the benefits for permanent disability require the total and permanent inability to work. This means after all avenues of treatment have been tried for a sufficient period of time to establish that the condition is permanent.
Temporary disability requires that someone is unable to work during the recovery period, and undergoing treatment as indicated by their treating psychiatrist. Should a client have a history of mental health problems, and even though an exclusion may be applied at the underwriting stage, people in this category have an increased risk of developing heart disease, strokes, diabetes and certain types of cancers, for which they are still covered.
Mental health disorders have become a significant problem in many people's lives and for advisers, the ability to offer meaningful cover that encompasses the full extent of a mental health claim - from diagnosis to recovery and return to work so that a client can manage the situation with minimal disruption - is an important part of the service they offer.
Disclaimer:
This article does not constitute tax, legal, financial, regulatory, accounting, technical or other advice. The material has been created for information purpose only and does not contain any personal recommendations. While every care has been taken in preparing this material, no member of Liberty gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information presented.
Please consult your financial adviser should you require advice of a financial nature and/or intermediary services.
Liberty Group Limited is a Licensed Life Insurer and an Authorised Financial Services Provider (no 2409).