Permanent health insurance claims for mental health absence – some coal face tips

Richard Martin

4

October

2022

Long term mental illness is of course a huge issue for any individual, as well as their family and friends. There is the illness itself to contend with and the associated worries about whether, how and when the person will be able to recover. There will be the impact on relationships.

There will often also be a financial worry, particularly if the absence looks like it is going to extend beyond the period of sick pay provided by the employer. Some are fortunate to have a permanent health insurance (PHI) policy, which may be provided by the employer (or the partnership in the case of many professionals) or may be a private policy taken out by the individual. The purpose of such insurance is to provide a substitute level of income for prolonged periods of absence, usually once any contractual sick pay has been exhausted.

While the existence of such cover can be a huge benefit, navigating and sustaining a claim can be difficult, particularly when the mental illness means you are not at your best. A conversation with someone going through a claim made us both think it might be helpful to share some tips from our respective coal face experiences. They have asked to remain anonymous, but the following is a product of our shared thinking. It is no substitute for getting help, and perhaps advice, on your own situation but it is offered in the hope it may provide guidance to those making a claim as well as those supporting them.

Keep your eyes on the prize

A successful PHI claim can obviously provide huge financial relief, and with it the time and space to recover one’s health. Pursuing a claim, and challenging denial of cover, can be demanding and can negatively impact one’s mental health. Further, there may sometimes feel like there is a tension between wanting to get better on the one hand, while needing to persuade an insurer that one is still unwell enough for cover to continue. The most important thing is always going to be your recovery. Everything else is subsidiary. There may be times when that doesn’t seem so clear, when you feel like your obligations to support your family or whatever else mean that you should be prioritising something else. That way of thinking, albeit very understandable, is very likely to be a symptom of confused thinking caused in part at least by the mental illness. Everyone who loves you and cares about you will want you to be healthy as their first, second and third priority. Listen to them when they tell you as much and try to love and care for yourself in the same way.  

Get organised early

Preparing and submitting a claim can take time, because of the information you need to get together, the different people you need to coordinate and because you are likely to be slower than usual at getting things done. What you want to avoid is your sick pay running out before a decision on cover has been made. As a guide, my sickness cover ran for six months and after three months we started thinking about a PHI claim and the claim was made and cover confirmed around the time the sick pay stopped.

Get support from others

Ideally your HR department should be able to help you get hold of the policy and the process for making a claim, and they may be able to help with a lot of the information required. Lean on them as much as you are able. The policy may well require the first steps of notifying a potential claim to be done by the employer, sometimes within a certain period of the absence starting, so talk to the HR team and encourage them to be proactive. You want to avoid the risk of an insurer taking any point about timing and you also want to avoid the anxiety that may be caused by worrying they might. Tick the necessary boxes as far as you can. You or your HR department, assuming they’re supportive, may also benefit from talking to the broker that placed the policy – they can help navigate the claim, may have insight into the general approach taken by the insurer and may also be able to apply influence when a claim is being considered. If you have any worries about the claim, getting input from a friend or family member who can provide you with dispassionate and objective insight and support can be invaluable. You might even want to get legal advice – this should not always be necessary at an early stage, but it might be helpful to clarify any specific issues of concern (and it may be advisable if problems seem to be emerging with the claim, as I address below).The general point to remember is that your loved ones may be suffering with you and so taking this burden away by getting help and advice from others may help them manage their own health.

Know the policy

There is no substitute for getting hold of the policy and knowing what it says. This applies to procedural issues but also to the nature and level of cover itself. Policies vary but typically they offer two kinds of cover – inability to do your actual job or inability to any job. The former is clearly the more generous – if you are a law firm partner for example, the fact that you are well enough to do a paper round but not return to your partner role will not affect the cover in the former case but may in the latter. Also, the level of cover will vary – what proportion of prior earnings will be paid on any successful claim and how are those prior earnings calculated in the case of variable earnings. Get a copy of the policy from the HR team or the broker and read it, or get someone to read it for you.

Don’t delay in submitting a claim or in providing information

Delay can have many effects. It may mean that the insurer takes some procedural point around the timing of a claim. It may be that the claim is not processed before your sick pay runs out. It may be that the insurer argues down the line that had you done x, y or z at an earlier stage (such as engaging in therapy or taking medication) then you would have recovered more quickly, or not have ended up as ill. Early submission of a claim and making sure all information is provided on time can help negate these risks. If the insurer is suggesting a different approach to your treatment, for example, you can take that into account, or your doctor can perhaps clarify why they disagree.

Be realistic about insurers

While the existence of the policy may be a godsend, and the insurer may be kind and well intentioned, insurance companies make their money from taking premiums, not paying out claims. You will need to cooperate with the insurer and when you are mentally unwell, as at any time, it is best to avoid arguments that you do not need to have. At the same time, do try to exercise some degree of wariness. You may well have an early conversation with a claims manager from the insurer who will be very nice and supportive. They will tell you how the process works and so on and they will ask you questions about the background- what happened and when etc. Be honest of course but also be mindful. They will in part at least be alert for any potential basis to refuse the claim by, for example, trying to blame your illness on someone or some factor which might negate the cover.

See and read your medical records

Invariably the insurer will want access to your medical records, and you will need to give your consent to this. The insurer will often have little other evidence to go on and so these records will be important. You will have the right to ask for a copy of the records (normally it is a box to tick on the consent form). Exercise that right and read the records carefully and think about what they contain and what arguments an insurer may take based upon the information. In my case, for example, my GP had noted in an early conversation with him that I was questioning my career choice. At a later stage my insurer sought to argue that this demonstrated that my not returning to my role was a lifestyle choice – that I didn’t want to be a lawyer any more as opposed to not being able to do my old job. The smallest detail can be used to mount an argument to reject a claim. Context is often likely to be ignored and any ambiguity interpreted in the insurer’s favour. If there is something in your records that concerns you or doesn’t feel accurate, either pre-empt any argument by supplying the context and explaining, or get your doctor to clarify what they meant. The same goes for information supplied by your employer such as your job description and performance records.

An independent assessment

As well as a report from your own treating medical team –normally your psychiatrist if you have one – the insurer will often ask that you be examined by an independent psychiatrist of their choosing. This may be when they consider the initial claim or when they are considering whether to continue cover. Although independent, this person is likely to do a lot of this work for the insurer so keep that in mind. Be honest and cooperative of course (they will be asked to confirm that you have been as part of their report) but at the same time be careful and also ask to see a copy of their report at the same time as it goes to the insurer. If you are concerned about anything they have said either raise this yourself or ask your psychiatrist to comment.

It is an ongoing process

Assuming your claim is successful, the insurer will generally want to review cover from time to time – initially this may be on a fairly regular basis but the regularity may reduce if the absence lasts several years. These reviews are an opportunity for the insurer to decide that in their opinion you are well enough to return to work and so to refuse further cover. They are therefore crucial and often very stressful. Prepare for them and treat them as you did the initial claim

No does not always mean no

If your claim is rejected, or cover is not renewed on a review, this can feel like a huge setback leading to all sorts of catastrophic thinking. You do have options. There will normally be internal appeal processes within the insurer, and you can also consider complaining to the Ombudsman (in the UK). There is also the possibility of legal proceedings in the extreme. Further, these issues are rarely black and white. An insurer will rarely be 100% certain that you do not qualify for (ongoing) cover. That is particularly the case with mental illness which can be so difficult to assess objectively. Sometimes a decision to refuse cover may be an attempt to test your resolve. In short, therefore, a refusal of cover does not need to be the end of the claim. Be prepared to challenge. But remember the key issue throughout is your health and the impact on your recovery of a lengthy fight needs to be kept very much in mind.

Use your data protection rights

In the UK you have the right to ask the insurer for copies of documents that contain your personal data – this will extend to their internal records of how they have considered and processed your claim and the basis for any refusal of cover. This can be vital when you are looking to challenge a decision.

Consider getting legal advice

If you are running into challenges, then you or your employer might benefit from some legal advice. How much your employer is willing to support you in this way will vary but they have a vested interest in ensuring that the cover they bought is provided, both for you and for any future claimants. Legal advice can help identify points to take and how to take them, can provide objectivity and experience and may also show the insurer that you are serious. They may feel less bullish of their position as a result. You will need to ensure there is no conflict of interest between you and your employer if you are taking legal advice together, but this should rarely be an issue provided boundaries are clear and the advice is limited to the pursuit of the PHI claim where your interests are likely to align closely.

Be sensible and honest

Insurers may sometimes do some investigating in the background – including checking social media – and may find out about things you are doing that you have not declared to them and which lead them to suggest you are better than you are claiming. Attending fractious council meetings while arguing you are not well enough to attend the office might be an example. Be alert to this and act accordingly, but above all be honest with your insurer. At one stage I was asked to give details of how I spent my waking hours day to day and week to week. I recall saying I played golf occasionally and that being used to mount an argument that I was therefore well enough to return to work. Once I explained that I managed about one hole at a time before collapsing exhausted, and that I played on my own, in the evening when there was no risk of having to speak to anyone else and so on, the point was dropped.

Consider a settlement

From an insurer’s point of view an open-ended claim for expensive cover that may go on indefinitely is not attractive. They tend to like certainty and will likely at some stage put an estimated value on the claim for their own internal accounting. Depending on your circumstances, having your income subject to the uncertainty of regular reviews and having regularly to argue how ill you are when what you really want to do is focus on getting better, can be unhelpful. You may therefore want to consider at some stage asking the insurer whether they would like to settle the claim for a lumpsum. There are inevitably tactics involved here and some legal advice from someone experienced in these matters can be very helpful – as may be input from the broker. And don’t assume you have to accept a first offer – this will be a commercial decision for the insurer and their first offer is unlikely to be their best offer. In my case I did push back and got a substantially improved offer. The settlement documentation was remarkably simple and short, and the payment came through quickly.

Critical illness cover

Alongside PHI insurance, there may be other insurance policies that might provide some cover, such as critical illness cover which tends to offer a lump sum in certain situations of accident or illness. Do check with your employer but also with any personal insurance policies you have in place as cover may turn up in unexpected places.

My memoir of my own experience of mental illness and recovery – This Too Will Pass – was published in November 2018.  You can order a copy here.