Mental health and protection
Unsurprisingly the last year has seen a rise in the number of people, across all ages, affected by issues relating to their mental health and general well-being.
As a result, this is increasingly becoming an issue Financial Planners have to confront when advising clients. It requires insight, product knowledge and the human touch, something I have always found is important in my 10 years with Kreston Reeves Financial Planning in forming and maintaining a trusting relationship with my clients.
Charity, Mental Health UK carried out a study and found that 86% of people did not know where to get advice on different types of insurance which may involve disclosing their mental health.
Even when making an insurance application, Scottish Widows have shared that only 40% of individuals completing their application forms disclose their mental health status, with a 2017 survey finding that the majority are worried an honest disclosure may result in cover being declined. However, in reality they provide cover in 96% of cases with 80% of these under standard terms, meaning there is no premium increase as a result either.
This clearly highlights the need for more open dialogue regarding this matter, especially as Scottish Widows have also published that 40% of GP appointments currently relate to mental health.
The FCA have expressed that they ‘want to see doing the right thing for vulnerable consumers deeply embedded in the culture of firms’ in their Guidance Notes. Part of the role of the individual Financial Planner is to identify those who are most likely to experience mental health concerns and to listen to them, understand and consequently offer those clients the relevant support.
Here at Kreston Reeves Financial Planning, it has been particularly important over the last year to keep in touch with clients, recognising that due to various lockdown restrictions the majority are experiencing significantly less contact with their friends and family, whether it be a review meeting or general catch-up. With face-to-face contact difficult, we have found it is also important to determine a preferred method, whether it is making advantage of virtual meeting software or a good old fashioned phone call to ensure our clients remain comfortable.
In terms of protection available to individuals, different types of policies can have different benefits to individual mental health – whether this is term protection often providing peace of mind that a client’s family will be financially stable even in the event of their death. A critical illness policy which can mean a policyholder’s way of living can be suitably adapted if becoming critically ill. Or an income protection policy can provide assurance that if too ill to work they can continue to keep their home, pay the bills and feed their children.
Many insurers are now also including complementary value-added benefits such as early intervention services and helplines where the policyholder can speak to trained mental health professionals without the need for a GP referral.
With many varying protection policy features, benefits and ways to set-up, it is important to discuss your own circumstances and requirements with a professional Financial Planner with knowledge and experience in this field to ensure any policy is right for you and there are no unexpected surprises upon event of any claim.
The protection market and how mental health is treated is ever-changing and I believe that the more familiar we become with mental health concerns, the more beneficial and re-assuring both the insurers and our service can be. I hope that in the future, it will become even more clear to recognise providers who offer a higher quality service in relation to resources and support.
To discuss your particular circumstances, protection requirements and/or existing policies with a Financial Planner please contact us on +44 (0) 330 124 1399 or provide your details on our online enquiry form.
If you wish to speak to someone about mental health matters, please see some useful links below for support and information:
The content of this article is for information only and does not constitute formal financial advice. This material is for general information only and does not constitute investment, tax, legal or other forms of advice.
You should not rely on this information to make, or refrain from making any decisions. Always obtain independent, professional advice for your own particular situation.
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