A growing number of advisers say they have experienced challenges with stress-related claims or confusion over whether claiming for stress on an income protection policy will be successful.
Additionally, advisers have seen insurers employ different approaches when processing a stress, depression or anxiety-related claim – all three common signs of a mental health condition.
Advisers say this is causing confusion and that clarification is needed.
Alan Knowles, managing director of Cura Financial Services, and board member and former chair of the Protection Distributors Group, says: “I’ve been doing this job for 18 years and only heard about this [issue] a year ago.
“Insurers tend to send information saying that IP [policies typically] cover you for any condition that stops you from working. But all of a sudden, this is rearing its head.”
The PDG wants to gain a better understanding of how big an issue this is and what approach insurers are taking to these sorts of claims.
So the group will be speaking to insurers to get their stance, which Knowles says could lead to creating a guide for advisers or lobbying for better transparency from insurers.
Knowles adds: “Many insurers do pay out, but the fact we have heard a number of stories now over the past couple of years means it is an issue and needs to be addressed.
“If it is a case the policy does not cover stress-related claims, then the adviser needs to be told, and the documentation needs to be clear.”
According to Adam Higgs, head of research – adviser services at FTRC, part of the confusion around stress and whether it is a claimable event on IP is that some insurers will ask in their underwriting questions if the client has suffered from stress.
The reason for this, he says, is that stress can lead to more serious mental health issues, however it is a very difficult question for people to answer because everyone suffers from stress at one point or another; this is natural and unlikely to lead to anything more serious.
Higgs adds: “Personally, my view is that if an insurer would not pay an IP claim due to stress then they should not be asking questions about stress in their application.
“When it comes to claims the general rule is that if the stress leading to the client being off work is caused by their employer or an aspect of their surroundings at work then it is unlikely to be paid unless there is also anxiety or depression diagnosed. The reason for this is that the client could change employer and theoretically the stress would diminish.
“Where the stress is due to something completely outside of the employer or employment then insurers may be more willing to consider the claim. If the reason for absence also includes anxiety or depression or both, then the insurer should be paying the claim as these are medical conditions.”
