Mental health and travel insurance – where to get the best protection?
Cathy Hudson looks at where insurers are getting it right when it comes to cover for mental health conditions, and where they have a way to go
As the world gets back on its feet after the Covid-19 pandemic and people start to move again, it’s more important than ever for travellers to have reliable insurance, giving them confidence when planning a trip away.
In today’s world, mental health conditions are incredibly common. According to latest data from the World Health Organization (WHO), a billion people around the world have a mental health concern and, in the first year of the pandemic, the rate of those with common mental health conditions, such as depression and anxiety, went up by more than 25 per cent. However, many travel insurers still exclude this growing group from their risk pool.
The good news is that in some countries, mental health conditions are now treated in the same way as physical ailments for travel insurance purposes, and innovations are helping to improve support for travellers. In others, however, those with a mental health condition are left with no protection.
Healthy coverage on offer
In the UK, mental health conditions have been covered by travel insurance in the same way as any other health condition for decades.
Before the Disability Discrimination Act came into force in 1995 – later replaced by the Equality Act 2010 – policies often contained blanket exclusions on mental health conditions, making claims impossible.
The legislation made it unlawful to discriminate against a disabled person (defined broadly by the Act as ‘any physical or mental impairment that has an adverse effect on someone’s ability to carry out normal day-to-day activities’) by not providing them with insurance, or providing it on different terms unless it’s reasonable to do so, based on an insurance risk assessment.
Travellers must declare any pre-existing medical conditions, usually defined as something they’ve received prescribed medication or treatment for (including investigations and check-ups), or even symptoms of, within a certain period before taking the policy out – this could be one to five years, depending on the condition and insurer. In most cases, they simply answer a series of medical screening questions for the insurer to determine whether it will cover the condition, and at what price.
“Most people with mental health conditions pose little risk and should be covered with no difference to anyone else,” commented Paul Beven, Global Managing Director at Verisk Risk Rating. “Anxiety and depression are in the top 10 of all medical conditions declared. The vast majority of those people will answer a few questions and be accepted for comprehensive cover, with minimal or no price increase.”
Travellers can also claim if they suddenly become ill with a mental health condition before or while they travel. “Travel insurance is designed to cover the unforeseen and emergency medical treatment overseas,” pointed out Malcolm Tarling from the Association of British Insurers (ABI). “If you’ve got no history and suddenly need treatment, you should be covered.”
The ABI has created a set of mental health insurance standards that members commit to, which include asking appropriate questions during the application process and clearly communicating cover decisions and exclusions.
Those with mental health problems in the UK can still face challenges when taking out travel insurance, however, and may be refused if considered high risk, or find that getting insurance is expensive.
Rheian Davies, Head of the Legal Unit at the mental health charity Mind, said: “This can happen even if you’ve had a mental health problem in the past, but have now recovered. Insurers often make these decisions with very little explanation, making it more difficult to challenge them.” However, specialist providers may be able to help in these circumstances.
The UK, along with much of Europe, is at the forefront of equality and inclusivity in terms of insurance, but the picture isn’t quite so rosy in other parts of the world.
Australia follows suit
Since the Australian landmark case of Ingram v QBE Insurance was decided in 2015, the way mental health conditions are covered in Australian policies has changed significantly and is now similar to the UK.
In that case, student Ella Ingram had to cancel a school trip to New York after experiencing severe depression. QBE rejected her claim for the cost of the trip because of a blanket exclusion in her travel insurance policy that said mental illness wasn’t covered, which was then standard practice across the industry.
She took the insurer to court, claiming discrimination because of her disability. As QBE couldn’t produce risk data to show why it had denied her cover, it was found to be in breach of the Equal Opportunity Act and had to pay her compensation.
Since the Australian landmark case of Ingram v QBE Insurance was decided in 2015, the way mental health conditions are covered in Australian travel insurance policies has changed significantly
Michael Storozhev, Head of Global Insurance Products and Underwriting at travel insurer Cover-More Group in Australia, noted how the industry has progressed in recent years, partly as a result of that landmark ruling: “There has been a lot of change since 2017. All policies in Australia generally have some form of mental health coverage now. Over the past five years, the type of coverage has changed and it’s extending more to pre-existing conditions, which weren’t covered on day one.”
Storozhev added that although there can still be discrimination around pricing, this has improved over the past two years. Some providers are also covering certain conditions as standard, which is an important step.
Cultural attitudes and different regulations in some countries can make it difficult to source help from assistance companies for mental health issues, but Cover-More will move a customer to an appropriate country to get help if necessary. It also has its own care provider network, so they can be directed to the right one.
The New Zealand market tends to mirror the Australian one, so there has been a similar journey there. However, in the rest of the Asia-Pacific region, mental health coverage is often still excluded.
Cover for trip cancellation or interruption caused by a mental health condition is generally excluded by US policies, although it’s sometimes covered if the condition results in hospitalisation
The Americas – a patchy landscape
In the US, the picture is more complicated. Cover for trip cancellation or interruption caused by a mental health condition is generally excluded, although it’s sometimes covered if the condition results in hospitalisation.
Travellers can pay for a ‘cancel for any reason’ add-on, which is available on some policies subject to certain restrictions, where it would be included – but only a percentage of the trip costs are covered, which could be up to 75 per cent.
Pre-existing conditions are also usually excluded for all types of claim, whether they relate to mental or physical health. However, a condition may be covered if it’s been stable within the period specified by the policy (known as the ‘lookback’ period, which could be 60 to 180 days before taking out the policy) where there have been no changes to medication, for example.
It may also be covered under a pre-existing medical condition exclusion waiver included in policies, which you can qualify for if certain criteria are met. Mental health conditions can still be excluded though.
“We advise people on specific questions to ask themselves and insurers when seeking out travel insurance, as they can’t always know if their mental health condition will be covered when they’re buying it,” S’Neta Benefield of the US Travel Insurance Association told ITIJ.
Beyond the US
In Canada, stability is key when it comes to the coverage of pre-existing conditions. Insurers specify lookback periods – which could be three or six months – in their policies, when a condition must be medically stable to be included. This is assessed when the insured person claims. Other conditions may be covered by declaring them up front and answering a series of questions.
Will McAleer, Executive Director of the Travel Health Insurance Association of Canada, added: “There used to be general exclusions for everything relating to mental health, but on the medical side, there’s now more generous coverage if, for example, hospitalisation is required. Some policies will still exclude minor mental health events.”
In Canada, stability is key when it comes to whether pre-existing conditions are covered
Mental health cover in Canadian travel insurance has been evolving in recent years, with an increase shortly before the pandemic. “It’s changed as a result of governments in Canada trying to make it easier for people to seek help and not be ashamed, like someone with diabetes would,” said McAleer. “Being able to get adequate coverage and the idea that a mental health condition should be treated like any other is the evolution of this.”
In Latin America, mental health conditions are not generally covered, unless there’s a medical emergency. Pre-existing conditions are being covered more by mainstream insurers in their basic policies than they used to be, but mental health ones are still excluded.
According to Chief Service Officer at global assistance and travel insurance provider Assist Card, Federico Tarling, who is based in Argentina, there isn’t much demand for mental health cover in Latin America – except from companies sending young people abroad on extended study programmes, so some benefits are provided.
“We offer a teleconsultation service, so students can speak to a psychologist in their own language. But if they need treatment, it won’t be covered if they’re not in their home country,” he said. “In the last three years, we’ve been activating this a lot more.”
Providing telephone or virtual counselling is one way travel insurers can offer mental health support, while also reducing losses from mental health-related claims. Travellers get immediate access to psychological assistance if they need it, so they’re less likely to make a claim.
Novus Health has headquarters in Canada and provides these services to insurers around the world, building in virtual connections with psychologists and psychiatrists, helping integrate them into their mobile applications and online platforms.
Chairman and CEO Robin Ingle said: “People can address the problem immediately, rather than having to go through an emergency assistance company. If they need to, they can then get referred to a bricks-and-mortar facility. The losses insurers are saving on far outweigh the costs, as it stops a situation getting out of control.”
Ingle believes travel insurance is key to helping the travel and tourism industry recover post-Covid: “People are afraid of getting stuck somewhere. Insurers can add certain levels of mental healthcare, without breaking the bank.”
The reassurance that comprehensive travel insurance policies offer someone with a mental health condition could, in itself, prevent an episode from occurring. With peace of mind, they’re less likely to panic during a relapse, confident they can get the required help quickly, without feeling judged. The technology and risk rating data are there for the taking should more insurers wish to provide customers with this cover. ■