In the UK, 1 in 4 adults experience a mental health problem each year in the UK [1]. In today's world, mental health issues are seen as a disability just as much as physical injuries.
If you suffer from conditions such as anxiety, depression, or PTSD, you may find that your ability to work is severely impacted. It could even mean that you need to take time off or reduce your working hours to prioritise your mental well-being. This is where income protection insurance can be a valuable asset.
We'll look at how income protection cover can provide financial support for mental health and what you need to know before applying.
What is income protection insurance?
Income protection insurance is designed to provide a monthly, tax-free income if you're unable to work due to illness or injury — including mental health conditions.
When you take out a policy, you pay a monthly premium, and in return, the insurer agrees to pay you a percentage of your income (usually between 50-70%). This financial support can help cover essential living costs like rent or mortgage payments, utility bills, and groceries, easing the burden during a difficult time.
Payments begin after a set waiting period, known as the deferment period, which can range from 1 day to 2 years, depending on the policy. The amount you receive is typically capped at a percentage of your gross annual income, usually up to 65%.
Generally, choosing a longer deferment period can lower your monthly premiums.
The policy will continue to pay out until you return to work, reach the end of your policy term, or pass away — whichever comes first.
Does income protection insurance cover mental health?
In the past, some insurance policies may have overlooked mental health conditions. However, many insurers have begun to recognise the impact these issues can have on a person's ability to work.
Income protection could be used to cover mental health conditions such as:
Depression
Anxiety disorders
Stress
Bi-polar disorder
Post-traumatic stress disorder
Occupational burnout
Bereavement
Why is income protection important for mental health?
Even if you have never suffered from a mental health issue, you need to remember that life is unpredictable. Situations such as stress from work, bereavement, or significant life changes can suddenly trigger a mental illness for anyone.
Income protection cover becomes crucial during such uncertain times, providing a safety net when you need it most. It can offer benefits such as:
Financial security
If your mental health is preventing you from working, the last thing you need is the added stress money. Income protection can help reduce these worries, ensuring you receive a steady income even when you are unable to perform your job due to your condition.
This financial cushion provides peace of mind, allowing you to focus on your recovery and treatment without the constant worry of a loss of earnings.
Not sure how much cover you need? See: How much Income Protection do I need?
Support for recovery
Money worries can make recovery even harder. Many experts suggest taking time off work to properly manage mental health, but that’s not always an option if you’re experiencing financial pressure.
Your Income protection policy could help take the pressure off by covering part of your income, so you can afford therapy, medication, or other treatments. Instead of rushing back to work before you're ready, you can take the time you need to recover properly.
Reducing work-related stress
Going back to work after struggling with mental illness can feel overwhelming. The pressure to keep up with deadlines, perform well, and interact with colleagues can add to your stress. Income protection helps ease this burden by giving you the financial support to take the time you need to recover properly.
With a steady income in place, you can return to work at a pace that suits you, rather than rushing back before you're ready. A gradual return can help you manage stress and avoid setbacks, making it easier to focus on your well-being while adjusting to work again.
Do I need to tell an insurer about my mental health?
It can be uncomfortable to talk about your mental health, but being honest and clear in your responses can help avoid the need for a GP report. If a report is required, it’s usually to help the insurer better understand your condition so they can offer the right cover for you.
Choosing not to disclose mental health issues when applying for income protection insurance can cause serious problems later on.
If the insurer finds out that you haven’t shared relevant health details, they may reject your claim when you need it most. This could leave you in a difficult position, as the safety net you hoped for might not be available.
How do insurers assess mental illness?
When applying for income protection insurance, insurers may want to assess your mental health history, especially if you have a pre-existing condition. One way they might do this is by requesting a medical report from your GP, but this can only happen with your consent.
Some insurers may apply exclusions, meaning you wouldn’t be able to claim for mental health-related reasons. However, many insurers now offer a more flexible approach, with reviewable exclusions. This means the exclusion could be removed after a certain period if your condition remains stable.
If you're making a claim due to a mental health-related issue, you’ll generally need to provide medical evidence, such as a doctor’s note or other supporting documents.
Can you get income protection with pre-existing mental health conditions?
A history of mental illness is usually considered a pre-existing condition, which can affect your policy terms. How it impacts your cover depends on how often and how severe your symptoms are.
If you have a mental health condition, the insurer may ask for more detailed information, such as:
Your diagnosis and when your symptoms started
The severity and frequency of your symptoms
Whether you’ve had time off work due to mental health issues
The treatments you’ve received or are currently undergoing
If you’ve ever had suicidal thoughts
If you are currently experiencing mental health issues, your premiums may be increased compared to having no history of mental health. The more serious your condition, the greater the likelihood that insurers will view you as a higher risk.
How to get income protection with Cavendish Online
At Cavendish Online, you can easily quote and apply for income protection by speaking with one of our expert protection advisers over the phone. There are no upfront fees for consulting with our team or receiving your income protection quotation.
If you have a mental health condition or a history of mental health issues, you can still apply for income protection though us. We understand that discussing your mental health can be uncomfortable, but being open and transparent can help ensure you get the most suitable cover for your circumstances.
Rest assured that our team will guide you through the process to ensure your needs are properly addressed and you are provided with the best options available. Call the Cavendish Online team today on
01392 436193 (Monday to Thursday 9am - 5.30pm, Friday 9am - 5pm)
