This week the Government decided to launch an enquiry into New Zealand’s mental health system in response to calls for a probe into funding and an investigation into the pressures that the system and those utilising its services are facing. Certainly the issue of mental health is one that needs addressing, but one of the things that probably won’t be covered in the enquiry is how mental health issues relate to risk Insurance and what impact any investigations or Doctor’s visits may have on your insurability and why it’s important to look at putting something in place sooner rather than later.
The term “mental health” is a wide ranging generic description that can cover a number of different conditions, ranging from stress and depression, through addictions and up to full blown neurological disorders. While many insurers shy away from paying out on mental health issues, a number of them will still provide funds should you develop symptoms that may have been caused by the initial problem. However, the degree of cover, pricing of your premiums and whether you can get cover at all will be dependent on which insurer you apply through as well as your own and your family’s previous medical history.
Recently, we had a client who completed an application and declared that their most recent trip to the Doctors had been due to frequent and ongoing headaches (A fairly common complaint). They mentioned that the doctor did a number of tests and ruled out any neurological problems. It was diagnosed as a tension headache caused by strain, which went away when our client, on their Doctor’s recommendation, reconfigured their work space. However, the Insurance underwriter determined that any mortgage protection or income related cover should be deferred for six months. They recommended the six month deferral to make sure “the likely tension headaches have been addressed. It looks like she was going to be having a work place assessment and assuming that workstation modifications have brought about and sustained resolution of all of her symptoms we would then be able to reconsider our decision. We need to make sure that there are no other likely underlying causes and symptoms don’t persist.” Obviously, this underwriter is erring on the side of extreme caution and other options are being investigated to get something in place for this otherwise completely healthy client.
But what if you are worried about your mental health and future impacts to your wellbeing and obtaining insurance? Unless there is a previous history relating to health issues, in most cases you will be able to get cover for Trauma and income protection insurances without too much trouble. However, studies show that the incidence of mental health issues is increasing at a rapid rate. According to official Government figures, “Over the past decade, the number of people accessing mental health services had jumped from 96,000 a year, to almost 168,000”. We have definitely seen an increase in stress related illnesses in recent times and the number of people getting treatment for alcohol and drug problems has doubled since 2008. In comparison, the budget for mental health services has increased by just 18 per cent during the same period, meaning the need for alternative avenues to access funds should you need them has never been greater. With a number of insurers paying out between a quarter and a third of their income cover claims for issues related to mental health, getting the right insurance advice is vital too.
