The overall number of people reporting mental health problems has been rising as well, with a 20 per cent increase between 1993 and 2014 of common mental health problems.
Advisers and the protection industry can play an enormously positive role in promoting mental wellbeing and providing clients with the tools to manage their mental (and physical) health. This can sit alongside the traditional place of protection insurance, in providing support and financial protection when a claim does arise.
The importance of protection insurance as the cornerstone of any sound financial planning and the impact this can have on clients’ mental health should not be understated.
Income protection is the most vital cover. Yet uptake remains low.
Campaigns such as Mental Health Awareness Week have driven a shift in the way mental health is perceived and talked about.
To mark Mental Health Awareness Week, we look at the impact mental health can have on income, and how those that earn and depend on their income can protect it through adequate insurance.
Income protection and critical illness
Income protection is the most vital cover. Yet uptake remains low. As much as 19 per cent of all long-term sickness absence in England has been attributed to a mental health condition.
And those with mental health conditions are often likely to experience a relapse or recurrence of that condition after it arises.
Protection Guru’s independent medical expert panel, which informs our tools and advice, says: “As with any health condition, mental health issues can be thought of as on a spectrum of severity. Critical illness policies only include 'severe mental illness' (SMI), with additional strict stipulations ensuring that coverage is only provided at the most extreme end of this spectrum.
Financial worries and poor mental health are often intrinsically linked.
“The difference in coverage between the two types of insurance is vast. Long-term sickness absence from work for mental health is extremely common, but the likelihood of a successful claim through critical illness is very small due to the strict stipulations attached to most wordings.”
Income protection policies are intended to pay out if the client is incapable of performing the material and substantial duties of their own occupation due to injury or ill-health.
Medical conditions, such as depression or anxiety, would therefore typically be covered and income protection plans can provide genuine protection should the client find themselves unable to work as a result of such a mental health problem.
