I recently attended a protection roundtable for advisers and providers, a joint Money Marketing and The Exeter event that set out to discuss the state of the protection sector.
It covered everything from service levels to claims handling. But the moment that has stayed with me was the session on mental-health support. It was not only lively but deeply revealing.
One adviser shared the story of a 19-year-old who watched her father die suddenly in front of her: a traumatic life event that would shake anyone. She sought grief counselling to cope with her loss. She was never on medication. She did not take time off work. She had no history of depression. She did exactly what we, as a society, encourage young people to do: she asked for help.
Yet every insurer excluded mental health on her income-protection application. She was effectively told that the consequences of seeking support rendered her uninsurable.
It is hard to imagine a clearer example of the disconnect between insurer rhetoric and underwriting reality
It is hard to imagine a clearer example of the disconnect between insurer rhetoric and underwriting reality.
As one adviser put it during the session: “Insurers know that counselling is good for you. They offer it once you have a policy. Why not reward someone for taking action before they buy cover.”
Another adviser added: “We talk positively about mental health on stage but, in reality, people are being penalised left, right and centre.”
A third adviser made a point that captured the issue perfectly: “With physical health, we are nuanced. You had a back twinge once and we exclude the lower lumbar and leave everything else. But have one counselling session and we exclude your entire mental health. Imagine if we did that the other way around.”
This is not a fringe issue. One in four of us will experience a mental-health problem in a given year
This is the protection sector’s uncomfortable truth. We rightly promote mental-health awareness. We run campaigns telling people to open up, to seek therapy early, to break the stigma.
But if someone discloses exactly that in an application form, they risk a loading, an exclusion or a decline. The message is mixed at best and hypocritical at worst.
And this is not a fringe issue. One in four of us will experience a mental-health problem in a given year. Recent data from the Adult Psychiatric Morbidity Survey found that 22.6% of adults aged 16 to 64 in England have a common mental-health condition such as anxiety or depression. A sizeable number of the population need support for their mental health.
The advisers on the panel were clear. Insurers need to catch up with the times. The way people access mental-health support has fundamentally changed. Therapy is no longer only for crisis points.
Therapy can be a sign of resilience, not instability. Seeking help early is a positive health behaviour. It should not be punished
Young people are more likely than ever to engage with counselling early, often facilitated by employers, universities, digital platforms or their GP. Underwriting frameworks that treat any engagement with therapy as a red flag are out of step with the world we now live in.
No one is arguing that insurers should ignore risk. But we need a more nuanced view. One that distinguishes short-term, preventative support from persistent or severe conditions.
Therapy can be a sign of resilience, not instability. Seeking help early is a positive health behaviour. It should not be punished.
The tragedy is that this inconsistency has consequences. People learn quickly. They hear stories like the one shared at our roundtable and conclude that honesty comes at a cost. They delay therapy until after they secure cover. They stay silent about symptoms. They hide what they are going through. That is the exact opposite of what our society is trying to promote.
The industry often says it wants people to come forward earlier. But the underwriting models must evolve to reflect it
We cannot tell people to speak up about their mental health while operating a protection system that quietly penalises them for doing so.
Consumer Duty has raised expectations around fair value, foreseeable harm and acting in good faith. Mental-health underwriting is fast becoming a test of whether the protection sector can live up to those standards. Advisers want to help clients. Insurers want sustainable books. Clients want honesty without punishment. These goals should not be mutually exclusive.
The industry often says it wants people to come forward earlier. To take action before crisis hits. To seek support when they need it. But if that is truly the intention, the underwriting models must evolve to reflect it.
The protection sector does not need perfect answers overnight. It does, however, need to confront the contradiction at the heart of its current approach: encouraging people to talk about mental health while penalising them when they do.
If we want a healthier and more open society, insurance must be part of the solution, not another reason for people to stay silent.
