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PDG launches income protection claims guide for mental health

Published

3 days ago

September 17, 2024

PDG launches income protection claims guide for mental health

The Protection Distributors Group (PDG) has released its guide on income protection claims for mental health and stress.

It was produced following reports from financial advisers about claims being turned down due to bereavement and work-related stress.

PDG said the guide has been designed to help advisers understand some of the potential issues surrounding income protection (IP) claims related to stress and mental health.

PDG board member Alan Knowles said: “Our objective is to educate advisers on some of the nuances of income protection claims for mental health, enabling them to prepare clients for what is most likely to result in a successful claim.

“However, adviser education is just one part of the jigsaw. We believe insurers also have a critical role to play in improving outcomes for customers.”

PDG chair Neil McCarthy added: “This new guide delivers a helpful summary to advisers helping them understand the potential issues surrounding IP claims related to stress and mental health.

“Over the past few years, the PDG members have published several guides covering the following topics: improving customer retention, early warning and lapse processes and signposting protection.

“We hope to generate more useful bulletins to make it easy to write protection, working with our members and insurers.”

PDG said it is providing the guide to protection firms and called on insurers to consider supporting it.

The guide provides suggestions for ensuring improved customer outcomes.

These include recommendations for business development managers and frontline staff about how they can use the same clear messaging when talking about their products to advisers.

It is recommended that work-related stress is not used as a claims example, as this is often a case-by-case decision rather than a certainty of claim.

Additionally, they must be clear with advisers that income protection is not guaranteed to pay out because the claimant has a sick note from their GP or other medical professional.

The guide also suggests reviewing T&Cs and policy summaries to check that they are clear on the issue.

Do they provide details on how claims are considered for mental health, or that having a sick note does not automatically mean a client has a valid claim?

Clarity here is critical to avoid customer confusion and ensure transparency, especially for those who buy without advice.

And it recommends that providers consider the language used in application forms and exclusions.

If stress is not considered a medical condition, it should not be referred to as such in any part of the insurer’s documentation.

Clear and precise language is essential for both adviser and customer understanding.

PDG, was established in 2016, is a collective of adviser firms dedicated to improving customer outcomes in the protection insurance sector.

The industry group of 26 member firms strives to raise the standard of service and advice in the sector, ensuring customers are well-informed and properly protected.

It has created a Claims Charter for the protection sector which has been adopted by most insurers. The charter outlines minimum best practice to help clients during the claims journey.

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