Why you should care about self-injury exclusions in insurance

Clauses in individual and group benefits plans exclude coverage for people who try to harm themselves. These clauses, set by insurers, are used in products such as accidental death policies and disability policies to prevent claimants from injuring themselves for monetary gain.

But those clauses, and the language within them, are viewed by some as outdated.

A recent CBC investigation found several clauses that state insurers may “refuse to pay for treatment related to self-inflicted injuries and suicide attempts whether […] the insured person was ‘sane or insane’ at the time.”

Read: 66% of employees with mental health issues don’t report it

But, in response to CBC’s investigation, some insurers are moving to eliminate phrases such as “sane or insane” in policy documents, and to offer more support for mentally ill customers. The issue is especially important since as many as 20% of Canadians will experience mental illness during their lifetimes, finds the Canadian Mental Health Association, and 8% of adults will experience major depression.

To speed up this process, the Canadian Life and Health Insurance Association is offering guidance to insurers.

“The industry has always been interested in the issue of people’s mental health,” says Frank Zinatelli, vice-president and general counsel for the association. “[But] you don’t always do a deep dive to [check] the specific wording of some of the provisions in contracts that might have been around a long time.” So he’s encouraging insurers to look to the health sector and medical community for new language.

Read: 57% of workplaces have no mental health strategy

In a separate email response to Advisor.ca, Zinatelli also discusses what steps insurers are already taking, though there likely won’t be a single solution. “Companies are working toward updating or removing [inappropriate] words, where the mental state of the insured needs to be referenced. These changes will be addressed as the policy wording and booklets are updated.”

He adds insurers are reviewing the application of self-injury exclusions within their various products.

Read: Accenture hosts mental health webinar for staff

This article was originally published on Benefits Canada‘s companion site, Advisor.ca