While depression is a serious illness, is it time for a more client-focused approach to underwriting? Paul Edwards investigates
Mental illness is, even in today's more open society, still something of a taboo subject. People, generally, are more accepting of, or sympathetic towards, sufferers of physical illnesses, while mental illness still often attracts either dismissal or ridicule.
Depression is very common and can have a very serious impact on the lives of sufferers and their families. But by disclosing some form of depression, what implication does this have on life cover and other protection products?
The disclosure of depression, and its related disorders, anxiety and stress, is common on application forms, while treatment of applicants who make such disclosures has always been problematic for underwriters.
However, the vast majority of such applicants will be of no greater risk, especially for life assurance, than other applicants considered 'normal' or standard rates.
For underwriters then, the dilemma is that while there is a need to identify people who are an increased risk of mortality (especially by suicide) and morbidity (the risk of illness) because of depression, the industry must try to not 'penalise' clients who disclose mental illness complaints with excessive evidence requests and unfair higher premiums if they are a normal risk.
Everyone suffers from feeling 'blue' or low from time to time - these feelings are a normal response to the difficult things which life throws at us, and for most people these feelings usually pass.
Disturbance
True clinical depression, however, is a more prolonged disturbance in the mood of the affected individual. This disturbance usually involves a general, often overwhelming, feeling of sadness. As well as this, common symptoms will include:
Hopelessness, and a sense of worthlessness
Low self-esteem
Sleeping problems
Loss of libido
Lack of appetite
Sense of guilt
Generalised fatigue
Increased amount of general aches and pains
Lack of energy
Agitation
Feeling of self hatred
Self-harming and suicidal thoughts.
These symptoms do not commonly occur all at the same time. And for a diagnosis of a 'major depressive' episode, a person needs to have suffered four or more of the symptoms in a period of two weeks or longer.
The precise causes of depression are complex and not completely understood, but certain trigger factors play a part. Chronic physical illnesses, grief, loss of a parent at an early age, and poverty or financial problems are common precipitating 'external' factors.
However, as depression can occur in individuals who have not undergone these life events, other 'internal' factors must play a part. For example, there is a tendency for depression (particularly manic depression) to run in families. Many researchers believe that chemical imbalances in the brain could also be a cause. The drug Prozac, among others, is believed to correct these imbalances.
Risk factors
Depression is a very common illness, affecting approximately two million people every year in the UK. It is estimated that one in five Britons will have suffered depression at some point, and it costs the NHS around £8 billion per year. It can affect people from all walks of life, irrespective of wealth, sex, race or gender.
Despite this apparent equality, analysis of the statistics can reveal some interesting patterns in society, gender, age, occupation, social class and lifestyle. Some of these can be useful risk markers.
For many people with depression, counselling or psychotherapy may be sufficient to effect a cure, particularly if external factors such as grief are the major cause of the problem.
However, some form of drug therapy, often alongside counselling, is common. Prozac, also known as fluoxetine, is commonly prescribed, as are other drugs with sedative qualities, such as amitriptyline, where there is an associated anxiety.
For patients with sleep or lethargy problems, drugs with a mild stimulant quality (lofepramine) may be useful. For patients with mania, lithium salts can be offered, while in extreme cases of very severe depression, electric shock treatment can be used.
The major risk factors for depression and its related ailments are self-harm or suicide. In 2003, the National Statistics Office recorded 3,270 deaths related to incidents of self-harm. This figure seems high, until it is considered that in the same year a total of 538,254 people died. Indeed, as a cause of death, suicide or self-harm ranks as a very low 0.65%, as opposed to circulatory diseases which constitute 38% of all UK deaths.
However, among certain sectors of the population, self-harm has a disproportionate impact, with distinct demographic differences in both age and gender. While depression occurs more frequently among women than men, three-quarters of all suicides are male.
Indeed, since the 1980s suicide has been the most common cause of death for men aged between 15 and 44.
The cause of this gender gap, of increasing concern to health professionals and government bodies, can be attributed to a number of factors operating in society. Men traditionally are less likely to talk about their problems or seek help than women. Also, some research shows that for men, marriage is an insulating factor in protecting against depression and suicide, so the growth in divorce rates and the increasing trend in young men living alone can be seen as contributory causes.
While demographics can indicate trends in society, on an individual basis, the most significant predictor of suicide risk by far is a past history of self-harm or attempted suicide.
It is estimated that around 10%-15% of people who have attempted suicide will eventually kill themselves, with the first year after the suicide attempt being the period of highest risk.
As a consequence, most life insurers will postpone applicants for one to two years after a suicide attempt, and treat anyone with multiple attempts with extreme caution. If an applicant does disclose depression, underwriters should look for certain features as guidance on how to approach the risk.
Demographics
Other factors for the underwriter to consider include the type of depression, its severity and the precipitating factors, that is, the cause of the depression. Also, does the applicant disclose an ongoing history of depression or one single episode? Did the applicant take time off work and did they receive inpatient treatment or have a psychiatric referral?
Looking at these questions, an underwriter can glean the main aspects of the risk just by a careful look at the disclosures on the application form. By considering these questions the majority of applicants who disclose depression should, and can be, accepted on application alone.
In less clear or more serious cases, getting the applicant to complete a more detailed medical questionnaire would be prudent, while a GP's report may be warranted on the cases displaying more adverse features.
However, whatever the source of information, the majority of applicants should still expect to be granted normal rates for life cover and critical illness. Income protection, total and permanent disability and payment protection cover (waiver) are a little more problematic, particularly if the depressive episode was recent, chronic or recurrent. Applicants with this sort of history should expect the underwriters to apply mental health exclusions in those circumstances.
Ongoing history
Where advisers have a client who discloses depression, they can reassure them that, in the majority of cases for life cover, depression is usually of little concern.
Difficulties in the underwriting process can occur however, if the individual has had a history of self-harm or where disability products are recommended, as exclusions could be applied.
So in a society where depression can be subject to stigma, it does not seem fair to automatically apply a rating to someone who on paper has admitted to some form of depression, which many people experience. It is, first and foremost, the responsibility of the underwriter to assess the risk of applicants on an individual basis.
Related to this is the responsibility of providers and advisers to encourage more honest, detailed and accurate application disclosures by their clients.
Techniques such as tele-underwriting can help in this regard. More detailed disclosure by clients then makes the underwriter's task much easier, as it leads to less reliance on expensive medical evidence, and can speed up the rate at which cover can be issued.
Paul Edwards is senior underwriting developer at AXA
Good features
Single episode
Female (for mortality not morbidity)
Long term with no sudden alteration of mood
Stable family background
Children (particularly if female)
Description of illness as 'stress reaction' or 'mild'
No time off work
No treatment or just counselling
Reactive to understandable life events
Professional occupation (unless an occupation identified as a higher risk e.g. teachers & dentists)
Bad or adverse features
Multiple episodes
Male
Recent onset
Young age (16-25)
Old age (65+)
History of self harm
Excess alcohol
Illicit drug use
Manual occupation (socio-economic groups III,IV & V have a higher preponderance of suicide)
Current treatment
Previous treatment with lithium or anti-psychotics (e.g. Haldol, Haloperidol)
Inpatient
Electric shock treatment
Regular visits to GP for psychosomatic ailments; ME, IBS, fibromyalgia and non-resolving musclo-skeletal disorders
Related conditions
Anxiety disorders are a group of related mental illnesses, typically characterised by an unreasonable feeling of chronic (long-term) anxiousness. They are among the most common forms of mental illnesses in the UK, and include people suffering panic attacks and phobias as well as 'generalised anxiety disorders' such as post-traumatic stress disorder.
Bipolar depression differs from common or 'uni-polar' depression in that the person swings from highs to extreme lows. During their high stage they are over enthusiastic, elated, have grandiose ideas and generally feel superhuman. Conversely during the 'lows' they suffer a crushing sense of depression. During these periods bipolar suffers carry a heightened risk of suicide. Treatment with lithium is common and electric shock therapy in extreme cases.
Danger factors
Occupation
Accessibility to the means to self-harm can be significant. Farmers, doctors, dentists, vets and pharmacists, are particular occupations that have a higher proportion of suicide than the general population.
Social class
People in classes III, IV & V (the semi-skilled, unskilled & manual occupations) have higher rates of depression and suicide. Poverty and the disappearance of traditional manufacturing jobs are perhaps an explanation for this.
Lifestyle
Use of illicit drugs and alcohol increases the risk of both depression and suicide. For example, 10% of suicide victims have a history of alcoholism.
