People with mental health issues charged 27 times more for travel insurance products

The latest findings from Money and Mental Health research highlights the difficulties that people with mental health conditions face when navigating the insurance market.

As part of the research, supported by a grant from the Which? Fund, Money and Mental Health conducted a mystery shopper exercise of 15 travel insurance providers to test how disclosing a mental health condition impacted on price and quality of the insurance offered. The charity wanted to particularly examine how options for customers with depression and bipolar disorder compared with those without mental health conditions, historic or ongoing.

The results showed that premiums often increased dramatically after a customer disclosed a mental health condition, sometimes even when the condition is stable or historic. Someone with severe depression is being charged an average of three times more than someone with no medical conditions. The average for someone with bipolar disorder is 11 times greater, with some having to pay 27 times more than a person with no medical conditions.

Some people saw their premiums double even though they hadn’t experienced symptoms in more than five years. Testing suggested that some insurers see people as more ‘high risk’ if they are receiving treatment or taking medication, when this could be a sign of a well-managed condition.

Mental health excluded

Many insurers exclude mental health conditions from the cover they offer, without reducing prices. Five out of the 15 insurance firms included exclusions for mental health conditions, without reducing the price of the insurance product. The charity said this is raising questions about whether people with mental health problems are getting fair value from insurance products.

Additionally, insurers are often declining to offer protection to people with more severe mental health conditions. In the mystery shopping exercise, nine out of 15 firms refused to insure a customer with severe bipolar disorder. The charity said it is concerned that many people with severe mental health conditions will not be able to access vital travel insurance.

By law, insurers are allowed to treat people with disabilities – including mental health conditions – differently when it comes to pricing decisions and what cover is offered.

Helen Undy, Chief Executive of the Money and Mental Health Policy Institute, said: “There is a real sense among people with mental health problems that they’re not being treated fairly – many even say they feel discriminated against by insurers. Not only is that causing unnecessary distress, it is also leaving people more exposed to the risk of financial harm during a cost of living crisis.”

Martin Lewis, Founder of the Money and Mental Health Policy Institute charity, added: “Money and Mental Health’s research is so important – to gather wide-scale data which indicates those with mental health issues are sometimes being penalised, unfairly, possibly illegally and resulting in them paying extortionate prices.”

One in three UK employees report significant mental health conditions, yet they are struggling to find insurance.