Life insurance is not a sexy topic. The intricacies of mortgages don’t exactly make for scintillating dinner party conversation, plus it encapsulates two major taboos: money and death.
It might not get pulses racing, but life insurance is a necessity when buying property, as well as providing financial protection for family members in the event of your death. Worryingly, it also appears to be steeped in outdated policies that stigmatise mental health. Due to an apparent lack of knowledge about mental illness, some life insurance providers are refusing coverage to people with a history of anxiety, self-harm and PTSD.
A few weeks ago, Frankie*, 26, was denied life insurance by Vitality on the basis of past mental health difficulties, having just co-bought a flat with her sister.
“They interviewed me and they were going through physical ailments [in] the last five years,” she says. “They didn’t care if it was before five years ago.” Then, the questions moved on to mental health. “When it came to [these] questions, they didn’t say, ‘in the last five years’, they just said, ‘Have you ever suffered from mental health problems?’”
Frankie told Vitality that she’d suffered from PTSD several years ago. She was then asked whether she’d ever self-harmed. She tells me: “I said, ‘Do you mean within the last five years? and he said, ‘No, ever.’”
After a series of invasive questions about her self-harm history, Frankie alleges that she was told that Vitality’s underwriters would reject her claim for life insurance.
Unfortunately, Frankie’s experience is one of many. Jessica*, 28, was rejected for life insurance by Royal London due to anxiety, despite no longer having any symptoms at the time of the phone call. She says that she was left feeling angry and confused. “I genuinely feel that because I had anxiety, they were worried about the risk of suicide so then didn’t want to take the risk of giving me life insurance,” she says. “I think there’s a complete lack of understanding around mental health issues.”
A Royal London spokesperson told VICE News: “Mental health disorders are commonly disclosed, and around 95 percent of applicants who do so are offered cover by us. Only when the condition is more severe, such as where the customer has been diagnosed with bipolar disorder or schizophrenia or had a recent suicide attempt, or where there is a combination with other possibly linked conditions such as alcohol misuse, are we not able to offer cover.”
However, the issue of life insurance providers refusing cover to those with mental illness is so widespread that Mental Health UK has conducted a report into it. Findings showed that 45 percent of mental illness sufferers said that they felt distressed after the life insurance application process.
“Even just going through the application can be very distressing for someone with a mental health problem,” Mental Health UK representative Sarah Murphy tells me. “Very personal questions asked, with no preamble and no explanation as to why those things may be important in a decision-making capacity.”
When Frankie was told that her life insurance would be declined on the basis of her mental health history, due to self-harm being on the “banned list”, she was incredulous. Frankie says that she hung up the phone almost in tears, telling Vitality: “It just seems very unfair that [I’ve] put a lot of work into moving on from what happened to me, and I’m being penalised for that.”
A spokesperson at Vitality commented on Frankie’s case. They told VICE News: “We have reviewed the information your interviewee received, and it seems that she was incorrectly given some information on our approach to mental health and life insurance. We are investigating this and in the meantime ask her to contact us so we can discuss this further and provide her with the correct information.”
They continued: “Having a previous mental health issue is not itself a barrier for taking out a life insurance policy or serious illness cover with Vitality, and a wide range of cover options exist for people, depending on the nature and status of their condition. As with all health conditions, people should disclose any mental health condition when setting up a policy so this can be reviewed and underwritten appropriately."
Yasmin, 32, was declined life insurance by DeadHappy last year. “I just wanted the cost of my funeral covered if something happened to me,” she says. “It was annoying, especially as I wasn’t expecting them to pay out if I die by suicide.”
When DeadHappy was approached about Yasmin’s case, co-founder Phil Zeidler told VICE News: “We’ve got to think about this better. There are a range of conditions that we haven’t automated the process for, so we’ve got a questionnaire that we send out if she were to complete those questions, we would go directly to the underwriters on a specific basis.”
Zeidler also acknowledged that DeadHappy’s current system is “clunky”, stating that “it’s not what we want to be”, and that the company is committed to improving the life insurance landscape when it comes to mental health. “That’s why we will automate everything at some point – the mental health issue is absolutely on our radar,” he said.
But the lack of clarity given to Frankie, Yasmin and Jessica about why their life insurance applications were rejected is common, according to the Mental Health UK report. It found that 70 percent of respondents wanted a better understanding of how insurers make decisions.
As the coronavirus crisis continues, it becomes more important than ever for life insurers to offer policies that cater to mental illness sufferers. Not only has the government’s stamp duty incentive pushed house sales up –meaning an increased number of people looking to purchase life insurance plans as they apply for mortgages – but the pandemic has forced us all to think more seriously about mortality. At the same time, COVID has played havoc with our mental health. Put all that together, and applying for life insurance could be incredibly damaging for people who already have a history of feeling vulnerable.
“Why on earth would you try and make it difficult for [people] to access such a fundamental product?” Zeidler said. “Just doesn’t make sense. So it’s definitely one we all need to get our backs behind, and solve.”
*Names have been changed.