How Mental Health Can Affect Insurance Cover

This article explains your legal rights when interacting with insurers, including whether you must disclose your mental health issue and what this may entail for the insurance you are provided.

Do I have to disclose my mental health issue to my insurance provider?

It makes sense to question whether you should disclose your mental health issue to an insurance provider or when applying for a health cash plan. However, there may be substantial repercussions if your insurer learns that you didn’t exactly tell the truth while answering questions regarding your mental health. For instance:

  • Any claim you submit, even one unrelated to your mental health issue, might be rejected if your policy is canceled or declared worthless.
  • To make up for the difference between the rate you were paying and the rate you would have paid if the insurer had been aware of your mental health issue, you can be assessed a lump sum cost.
  • If they learn after a claim has been resolved, they could file a lawsuit against you to recoup the money they spent.
  • The next time you apply for insurance, it could be more difficult.

Therefore, if an insurer asks you about your mental health, it is not a good idea to withhold this information.

If I inform them, would they behave differently toward me?

Yes, but only as long as it’s legal.

An insurer bases its decisions on whether to cover you and how much to charge you on an evaluation of risk. They evaluate the likelihood that you will file a claim, and they will charge you more if they believe you are more likely to do so.

As a result, if an insurer can demonstrate that there is a higher chance of having to pay out a claim due to your impairment, they may legally reject your insurance application.

However, in order for this to be legal, they must demonstrate that they made a reasonable judgment based on information that was both relevant and trustworthy.

The Equality Act 2010 is the statute that safeguards you against handicap discrimination in England and Wales. The insurance companies ability to discriminate against you is governed by this statute. Examples of discrimination include declining to provide coverage for you or raising your rates because of your handicap.

You may be protected against discrimination under the Equality Act if an insurer bases judgments on, for instance:

  • a condition you formerly had but no longer experience, or
  • a disability they mistakenly think you have.

Can my medical records be accessed by insurance notwithstanding my wishes?

Without your permission, insurers cannot view your medical records.

However, if you disclose a mental health issue, the insurance will frequently want more details from your doctor. They could also demand that you visit a particular outside physician. You are entitled to the following in this circumstance:

  • You must give formal permission for the insurer to speak with your doctor. Without it, they are breaking the law.
  • A doctor’s report about you has to be submitted, but you have the right to view it beforehand. This is true whether the physician is your primary care physician, another doctor you’ve already seen, or an independent physician that the insurance has selected.
  • If you don’t like a report, you can occasionally block it from being sent. This is true of reports from your general practitioner or another doctor who has previously treated you. Unfortunately, if the report is from a private physician chosen by the insurance, this is not the case. Even if you disagree with the report, you are not allowed to prevent it from being transmitted in that situation.
  • If you believe any information in the report is incorrect or deceptive, you can request that your doctor or another healthcare provider amend it. You have the right to request that a written statement explaining what you believe to be false or misleading be appended to the medical report if they refuse to make the adjustments you’ve proposed.

An insurer may decline to offer you coverage if you decline to provide written consent, urge your physician not to deliver their report, or object to visiting an outside physician. Unfortunately, since it is their legal right, you are powerless to stop it.

What should I do if my application or claim is denied by an insurer?

Several options are available to you if you believe that an insurer has unfairly treated you because of your mental health issue:

Enquire about the choice made by the insurance

If you believe that the insurer has not adequately explained the reasons for rejecting your application for insurance coverage or the high rate they have proposed, you may:

  • Ask the insurer what data they used to make their choice by getting in touch with them.
  • Inquire specifically about any medical reports, statistical information, or research sources on which they have relied.
  • Ask them to explain in detail how they came to their choice.

Complain

If you don’t agree with the insurer’s justification for their choice, you can formally complain to the insurer. For formal complaints, insurers have eight weeks to react. You can file a complaint with the Financial Ombudsman Service (FOS) if they don’t answer or if you are unhappy with how they handle your issue. Please be aware that the procedure might take some time. If the FOS determines your complaint is justified, the insurer may have to provide you with an apology or compensation.

Speak with a lawyer

Depending on your circumstances, you might be able to sue the insurance. Make sure you get legal counsel from one of the following as a first step:

  • Citizen Advice
  • a territorial law office
  • a private solicitor.

You must file a lawsuit within six months (minus one day) of the occurrence to be eligible to do so. This would be six months following the denial of insurance coverage had been denied. If your legal action is successful, the insurer can be forced to pay you compensation or consent to give you insurance at a reasonable price.

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