Mortgage And Life Insurance Affected by Past Depression

shafted2015

Apologies for the lengthy post. In a nutshell, my girlfriend and I have applied for mortgage protection and life insurance, and have been told our monthly payments will be increased significantly above the norm as they have deemed my girlfriend to be a “suicide risk”. Just wondering if anybody has encountered this before and whether it is worth appealing the decision or applying to a different insurance provider? I would also be interested to hear from anybody who works within the insurance industry who reads this forum. I have included more details below:

We were approved for a mortgage on a new house, and we have already signed the contracts. The sale is due to close in 3 weeks. We had applied for mortgage protection and life insurance a few weeks before signing, and this week the insurance company has replied to tell us that they will offer insurance, but with an extra 57% added onto the standard premium as they deem my girlfriend to be a suicide risk. They said that after 4 years, they will reduce this extra loading to 27% above the standard rate for the remainder of the mortgage term (26 years).

Naturally we were in shock on receiving this news. My girlfriend has no history of self-harm and has never attempted suicide. When we met with the representative from the insurance company a few weeks ago we had to fill in a medical history report in her presence, which is standard practice. My gf disclosed that 2 years ago she was suffering from depression/anxiety, so made a visit to her GP to get it treated. She was prescribed anti-depressants and referred to a HSE psychiatrist. The psychiatrist was of no assistance, he would just routinely renew the anti-depressant prescription and was not even discussing the root cause of the depression/anxiety or how to deal with it. A few months later she decided herself to come off the medication and instead began attending counselling as well as group therapy.

At no stage during all of this (or previously, or since) was my girlfriend suicidal. When we were filling out the medical form with the insurance rep, she told us not to worry about the history of depression/anxiety as it was very common and there was no history of suicide or self-harm. So when we got the news this week that the premium was being loaded, it was a shock, and an insult. The insurance company requested a medical history from her GP, and he provided them with his consultation notes from 2 years ago. She has spoken to the doctor to ask what could have gone wrong with this application, and he said that during that consultation he asked her “have you ever thought about suicide”. She answered yes to that. It is a standard question however, and the doctor did not deem her to be a suicide risk. On hearing what has happened he has written a letter for us to state that she was not suicidal at the time, or presently.

The insurance rep has said that she is very surprised by the outcome of this and she doesn’t think there would be any point in appealing the decision. She also said that there is no point in applying for life insurance with a different provider, as they all share their information. We don’t want to sign up to this insurance, as it would be an admission that my gf is a suicide risk, when she is not. It could also jeopardize any future application that she makes, as her name and medical history could be “tarnished”. However, we have signed contracts on the house and cannot draw down our mortgage without insurance cover.

Lastly, there are multiple media campaigns targeting people with depression and asking them to get help, and not to suffer in silence. What is the point of asking for help if you’re going to be punished for it for the rest of your life by the insurance companies!?

phormium

As a workaround to allow you draw down your mortgage will your lender allow you both sign a waiver confirming she has no cover as it is too expensive to take out? There is a provision for people who cannot get cover at a reasonable rate to do this, but it is up to the individual banks whether or not they accept it.

If they allow the waiver I would take it and pursue new life cover in your own time, if you cannot get lower non loaded quotes that you can afford then maybe take out a policy for a lesser amount to keep the premium affordable and increase it when the time specification has passed.

Henry Ford III

Why do you need mortage protection and life assurance?

When I remortgaged several years ago and had to take out new life insurance, my life insurance company doubled the premium for the first 2 years of the policy and then it went back to normal. I had to go for a medical assessment by a doctor nominated by the insurance company.
They included a clause that the life cover does not cover death in the event of suicide in the first 2 years of the policy.
This was because I was diagnosed as bipolar.
If I were you I would shop around. You should expect some sort of loading but you might get a more reasonable deal from another provider.

Piriz

Every person in the world has thought about suicide, this is very unfair and is a very poor assessment of risk.
this type of problem will deter people from visiting their GP with mental health problems.
i would expect the Data Protection act prevents them sharing your data with other companies without your permission

Go to an insurance broker and get a letter from your gp stating no risk of suicide

**** situation sorry to hear this..

Leprechaun77

Just a couple of points to note here:

It would seem that the loading applied for this condition was +100% (57% premium increase which probably indicate she is a couple of years older than you?). For comparison sakes, this would equate roughly to the difference in premium for someone who smokes.

With regard to the loading, the factors you mention would be of concern to underwriters. Under normal circumstances, the fact you were referred to a psychiatrist puts you in a higher risk category than someone who is treated by just a GP. The other part that would send out alarm bells to the underwriters would be the fact that she came off medication by her own choice. This is not good for trying to assess a risk on any medical condition. (I do believe the area of mental health needs to be understood more....many GP's probably dish out the antidepressants too easily, but the other alternatives are not really viable for most). If she was deemed suicidal that recently she wouldn't even get cover btw.

I would apply through a broker to another 2-3 insurers to see how they would treat this condition. The 'rep' was advising not to go elsewhere as it is a potential lost sale. The sharing of medical papers is a practice that has not happened in many years so you have been advised incorrectly here. This old Adverse Risk system was effectively decommissioned a while back.

It was also a mistake to sign contracts before this cover was in place so I am not sure who allowed you to do this or what advice was received.....be thankful I suppose that cover was not turned down.....this is not uncommon!

I would be surprised if you got better terms based on the details above, but you can always reapply in a couple of years and if there are no issues you will have a better chance of getting the standard book rate. Also, if you are going directly through a bank, quite often they will be giving you their standard book rate....if so you could probably reduce your premium by seeing who is cheapest in the market outside the banks rate.

Leprechaun77

Piriz wrote: »

Every person in the world has thought about suicide, this is very unfair and is a very poor assessment of risk.

i would expect the Data Protection act prevents them sharing your data with other companies without your permission
.

Everybody has thought about suicide?......I don't subscribe to this theory...I'm sure everybody has felt down at some stage though.

These reports are not shared anymore, but when they were the applicant signed the proposal form which gives the insurer permission to seek medical records.

I do agree that the diagnosis, treatment etc around mental health needs a thorough revamp

PaulM1977

I would suggest going to a broker who can shop around for you. If your current insurer that you are using is a tied-agent, then they will naturally tell you that you won't get a better offer elsewhere as they cannot try any other insurers.

screamer

I don't understand why they would load it as in the case of suicide they don't pay out. I am asthmatic and you should see the premium I have to pay it's a disgrace.

Leprechaun77

screamer wrote: »

I don't understand why they would load it as in the case of suicide they don't pay out. I am asthmatic and you should see the premium I have to pay it's a disgrace.

These policies DO pay out on suicide, but generally not in the first 12 months.

Most asthmatics will get standard rates. A loading is generally applied if you have had recent attacks, or are consistently taking more than an inhaler to control the condition. (I.e the severe end of the scale).

If you are asked to pay an increased premium on any life insurance policy, it is always worthwhile applying to a few other companies, as each one may have a different view on your condition. Each company will use a global reinsurer to minimise and spread the risk of each policy, so these reinsurers may all have different claims experience worldwide. Some will be more lenient on certain conditions than others. It is effectively these reinsurers who dictate if a loading should be applied.

PaulM1977

To follow up on Leprechaun77's post, how long was it since you took out this policy that you are paying such a high premium on? If it is more than 3 year, you may want to revisit it, as you may be able to get a reduction in the cost, if there has been no medical issues in relation to your asthma.

Also speak with an independent financial broker who can shop around for you.

Thanks

PaulM

Trish56

I think the most important issue here is the Doctor's records where it is noted that she answered yes to thinking of committing suicide. All Life Companies will apply for a Doctor's report and if this is on record all will load the policy so it's important for her to discuss with her Doctor and in view of just one episode of depression and no longer on medication he may agree to have it removed. It may also be possible to take out a policy with suicide not covered.

shafted2015 wrote: »

Apologies for the lengthy post. In a nutshell, my girlfriend and I have applied for mortgage protection and life insurance, and have been told our monthly payments will be increased significantly above the norm as they have deemed my girlfriend to be a “suicide risk”. Just wondering if anybody has encountered this before and whether it is worth appealing the decision or applying to a different insurance provider? I would also be interested to hear from anybody who works within the insurance industry who reads this forum. I have included more details below:

We were approved for a mortgage on a new house, and we have already signed the contracts. The sale is due to close in 3 weeks. We had applied for mortgage protection and life insurance a few weeks before signing, and this week the insurance company has replied to tell us that they will offer insurance, but with an extra 57% added onto the standard premium as they deem my girlfriend to be a suicide risk. They said that after 4 years, they will reduce this extra loading to 27% above the standard rate for the remainder of the mortgage term (26 years).

Naturally we were in shock on receiving this news. My girlfriend has no history of self-harm and has never attempted suicide. When we met with the representative from the insurance company a few weeks ago we had to fill in a medical history report in her presence, which is standard practice. My gf disclosed that 2 years ago she was suffering from depression/anxiety, so made a visit to her GP to get it treated. She was prescribed anti-depressants and referred to a HSE psychiatrist. The psychiatrist was of no assistance, he would just routinely renew the anti-depressant prescription and was not even discussing the root cause of the depression/anxiety or how to deal with it. A few months later she decided herself to come off the medication and instead began attending counselling as well as group therapy.

At no stage during all of this (or previously, or since) was my girlfriend suicidal. When we were filling out the medical form with the insurance rep, she told us not to worry about the history of depression/anxiety as it was very common and there was no history of suicide or self-harm. So when we got the news this week that the premium was being loaded, it was a shock, and an insult. The insurance company requested a medical history from her GP, and he provided them with his consultation notes from 2 years ago. She has spoken to the doctor to ask what could have gone wrong with this application, and he said that during that consultation he asked her “have you ever thought about suicide”. She answered yes to that. It is a standard question however, and the doctor did not deem her to be a suicide risk. On hearing what has happened he has written a letter for us to state that she was not suicidal at the time, or presently.

The insurance rep has said that she is very surprised by the outcome of this and she doesn’t think there would be any point in appealing the decision. She also said that there is no point in applying for life insurance with a different provider, as they all share their information. We don’t want to sign up to this insurance, as it would be an admission that my gf is a suicide risk, when she is not. It could also jeopardize any future application that she makes, as her name and medical history could be “tarnished”. However, we have signed contracts on the house and cannot draw down our mortgage without insurance cover.

Lastly, there are multiple media campaigns targeting people with depression and asking them to get help, and not to suffer in silence. What is the point of asking for help if you’re going to be punished for it for the rest of your life by the insurance companies!?

Henry Ford III

Piriz wrote: »

Every person in the world has thought about suicide, this is very unfair and is a very poor assessment of risk.
this type of problem will deter people from visiting their GP with mental health problems.
i would expect the Data Protection act prevents them sharing your data with other companies without your permission

Go to an insurance broker and get a letter from your gp stating no risk of suicide

**** situation sorry to hear this..

1/. Not everyone has thought about suicide. That's a sily notion.

2/. There is a database for loaded and non standard risks for life assurance. It's there to avoid attempted fraud. Details are available to all insurers. Data protection isn't an issue. The proposers declaration covers all.

3/. A letter from a G.P. won't suffice in those circumstances.

Leprechaun77

Trish56 wrote: »

I think the most important issue here is the Doctor's records where it is noted that she answered yes to thinking of committing suicide. All Life Companies will apply for a Doctor's report and if this is on record all will load the policy so it's important for her to discuss with her Doctor and in view of just one episode of depression and no longer on medication he may agree to have it removed. It may also be possible to take out a policy with suicide not covered.

The doctor's report will not show that she felt suicidal. The depression was two years ago so she would not get cover at all for such a recent attempt. It is unwise to send her on a wild goose chase to get this changed, as it most likely does not exist.

The 'suicide risk' referred to in the OP refers to an increased chance of a suicide attempt being made due to the mental health issue mentioned, and the very recent timing of it. This applies in a similar manner to someone being rated for 'heart attack risk' on the basis that they have high blood pressure for example. They have not had a heart attack, but exhibit a symptom that increases their chances of having one.

Whilst I have seen them in the past, it is unusual for a life contract to be issued with an 'exclusion' on suicide. In this instance, the lender will want full security on the loan by way of a 'full cover' policy. I'm sure they would not want any exclusions to be dealing with in the event of a death claim. On a side note, there are certain circumstances that a life policy would be paid on suicide within the first 12/24 months. I won't elaborate but if the policy is used as security on a loan, and a legal assignment exists, that is when the legal craic starts. ( this is another reason why the life companies don't like issuing these exclusions as they can become invalid and they still may have to pay)

Trish56

The OP mentioned that the Doctors report mentioned that she thought about Suicide this is clearly the reason why the premium has been loaded. She has checked this with her Doctor so no wild goose chase involved, it's already confirmed.

Leprechaun77 wrote: »

The doctor's report will not show that she felt suicidal. The depression was two years ago so she would not get cover at all for such a recent attempt. It is unwise to send her on a wild goose chase to get this changed, as it most likely does not exist.

The 'suicide risk' referred to in the OP refers to an increased chance of a suicide attempt being made due to the mental health issue mentioned, and the very recent timing of it. This applies in a similar manner to someone being rated for 'heart attack risk' on the basis that they have high blood pressure for example. They have not had a heart attack, but exhibit a symptom that increases their chances of having one.

Whilst I have seen them in the past, it is unusual for a life contract to be issued with an 'exclusion' on suicide. In this instance, the lender will want full security on the loan by way of a 'full cover' policy. I'm sure they would not want any exclusions to be dealing with in the event of a death claim. On a side note, there are certain circumstances that a life policy would be paid on suicide within the first 12/24 months. I won't elaborate but if the policy is used as security on a loan, and a legal assignment exists, that is when the legal craic starts. ( this is another reason why the life companies don't like issuing these exclusions as they can become invalid and they still may have to pay)

Leprechaun77

Trish56 wrote: »

The OP mentioned that the Doctors report mentioned that she thought about Suicide this is clearly the reason why the premium has been loaded. She has checked this with her Doctor so no wild goose chase involved, it's already confirmed.

Sorry, I take one back. It's been a couple of days since I read the full post.

shafted2015

OP here, thought I'd give an update:

Many thanks to you all for suggesting that we go to a broker. We have done just that, and we achieved a positive result. We managed to get our life insurance with a different company via the broker, and with no loading due to the depression. We had a lot of hoops to jump through on the way, a lot of extra forms to fill in, phone interviews with medical experts, etc., but we got there in the end.

So thanks again to you all for suggesting that

PaulM1977

Great news, glad to hear their was a positive outcome in the end.

CINCLANTFLT

Yikes... I work in FS and someone asked me an informal question on this only a few days ago... I said I would look into it... Then I see this thread... Good outcome at the end :-)