Insurance and mental illness

You will probably need to apply for insurance a number of times during your life. This section provides information on getting insurance, your rights, and some suggestions of companies that have offered insurance in the past to people with mental health problems.

Types of insurance that you may have to apply for include:

  • life insurance
  • travel insurance
  • health insurance
  • income protection insurance (when you take out a mortgage)
  • motor insurance.

Mental health charities have long recognised that it can be difficult for people with mental health problems to get some kinds of insurance. Insurance is calculated on the perceived likelihood that the insurance company will have to pay out money to you.

For instance, if you have pre-existing mental health problem and you take out travel insurance, you are deemed at greater risk of getting ill and therefore needing to make a claim. If you are at greater risk of making a claim you will have to pay more or may be denied insurance.

Insurance and your rights

Insurance is covered by the Disability Discrimination Act 1995 (DDA). The Act makes it illegal to provide goods, facilities and services to a disabled person (including people with mental health problems) on terms which are unjustifiably different from those given to other people. Disability Discrimination Act

Since 1990, the DDA has made it illegal to refuse insurance, or charge higher premiums, unless the company can demonstrate statistically higher risks as a direct result of a specific mental health condition.

When deciding whether to insure someone, an insurance company should carry out a risk assessment which should include a statistical analysis that the person presents "a higher than average risk". In order to assess risk, insurers should ask a number of questions about your history of mental illness.

Are there any guidelines insurers should follow?

The Association of British Insurers provides general guidelines for insurers on insurance and the Disability Discrimination Act 1995. In general, an insurance company must be fair and reasonable in its dealings with disabled people and must account for any difference in treatment between disabled and non-disabled people.

Insurer's decisions must be based on information relevant to the assessment of the risk to be insured and from a reliable resource. These may include:

  • actuarial or statistical data
  • medical research information
  • a medical report, or
  • opinion on an individual from a reliable source.

Insurers must make sure that the information is accurate and that their use of it is reasonable. It must be shown that the disabled person has a higher risk of becoming ill than someone who does not have their history of illness.

What to do if you have been discriminated against

There are many instances where insurers can still justify discrimination despite the existence of disability legislation. However, if you feel that an insurer has discriminated against you because you have a mental health problem you could have a case under the Disability Discrimination Act 1995.


Making a complaint

You must make a complaint first to the firm which you believe is discriminating against you. If you are unhappy with the response you receive you can then complain to the Financial Ombudsman Service. It states that:

  • Cancellation of a holiday due to mental illness should be treated in the same way as other illnesses.
  • Cancellation of a holiday by parents through their son or daughter suffering a mental breakdown should be compensated for because the policy was taken out by them, not by their son or daughter.
  • Where a person took their own life and, at the time of doing so, there was no doubt that 'the balance of their mind was disturbed', they remain covered by insurance.
  • You only have to tell the insurance company about a pre-existing condition if there is an opportunity to do so.

Taking legal action

If you are applying for insurance and you think that you have been unfairly discriminated against you could have a case under the Disability Discrimination Act 1995 and you may wish to seek legal advice. Suing

If you decide to take this route, you will need to seek legal advice from a solicitor who specialises in disability legislation. They will be able to tell you whether you have a case and the likelihood of winning. There have been some successes for people who have taken this route.

Mind has a list of solicitors who specialise in disability. The Law Society can also advise on suitably qualified solicitors.

Write to the Social Exclusion Unit

Being unable to obtain different sorts of insurance is a form of social exclusions as it is exclusion of one class of people, people with mental illness. The Social Exclusion Unit was set up by the Prime Minister to help improve Government action to reduce social exclusion.

Several cases that have been brought under the Disability Discrimination Act against insurers have subsequently been forwarded to the Social Exclusion Unit.

National Advice Service Factsheets

The National Advice Service produces factsheets on issues related to mental illness. The below information may be of use to you:

Insurance factsheet