Ontario man says life insurance application denied due to anxiety disorder

A man in Elmira, Ont., says his application for life insurance was denied by Sun Life Financial on the basis of his generalized anxiety disorder.

Expert says it's not uncommon, but it is worrisome

Robert Pugh said he felt like he let his family down when he received a letter from Sun Life saying his application for life insurance was denied. (Paula Duhatschek/CBC)

A man in Elmira, Ont., says Sun Life Financial denied his application for life insurance because he has generalized anxiety disorder, and he's worried the practice could discourage others from seeking help for mental illness.

Robert Pugh, 32, and his wife, Amber, have a toddler and another child on the way.

In the spring, the couple decided each would purchase a term-based life insurance policy, so neither would be left struggling to pay the mortgage if the other parent were to die unexpectedly.

In April, Pugh said they submitted paperwork to Sun Life for a SunSpectrum life insurance plan over a 10-year term.

They each underwent a paramedical exam (an interview to collect medical history) and a phone interview. Pugh said he disclosed the fact that he had anxiety and took the medication Pristiq as well as CBD oil under the supervision of his doctor. He's been receiving treatment for his anxiety disorder since his late 20s.

While Pugh's wife was approved, his own application was denied.

Pugh said he got a letter from Sun Life in July, saying his application was denied "based on [Sun Life's] assessment that includes information about your personal health."

"It's a blow," he said. "I took it like I was failing my family ... Like what if something were to happen to me? And is my wife gonna be OK, are my kids gonna be OK?"

Upsetting news

Pugh said he called Sun Life to press for details, and was told that the rejection was due to his mental health condition, but that he could reapply in six months. The news was upsetting, Pugh said.

A spokesperson for Sun Life declined to an interview with CBC, and refused to comment specifically on Pugh's case.

In an emailed statement, the company said they recognize anxiety is one of the most common mental health conditions and that it varies in severity, but there are times when applicants could be denied coverage for it.

"In most cases, we approve applications from clients with generalized or mild anxiety. There are instances where a client may encounter higher premiums or not be eligible for coverage," the statement said.

Robert Pugh and his wife, Amber, decided to apply for life insurance when they learned they were expecting another child. (Paula Duhatschek/CBC)

The statement also said clients are welcome to ask to have their applications reviewed or to apply for products that ask for limited or no health information.

The spokesperson declined to share Sun Life's underwriting guidelines with CBC, or to say in what cases it would deny an application based on anxiety.

Fairly common practice

Vicki Zhang, who works in statistical science at the University of Toronto, said "it's a fairly common" industry practice for insurers to penalize those with pre-existing conditions, whether they are physical or mental.

"The private insurance sector has become very, very competitive and very profit-driven," said Zhang. "From their bottom-line perspective, it makes sense for them not to cover someone with mental illness ... especially a known condition."
Lawyer Courtney Mulqueen says she's concerned that people with mental illnesses are being discriminated against when it comes to acquiring life insurance. (Submitted by Courtney Mulqueen)

From a consumer perspective, the Ontario Human Rights Code says that "services and contracts cannot generally make distinctions based on disability." 

However, there is an exception that allows insurers to make a "distinction, exclusion or preference on reasonable and bona fide grounds" because of disability. That's according to an email statement from the Ontario Human Rights Commission.

Courtney Mulqueen, a Toronto-based lawyer who practises disability insurance law, said that means insurers need to be able to prove that a condition, such as anxiety, carries a substantial increase in risk.

She said that with something like a generalized anxiety disorder, "there's a very good argument to suggest that that does not substantially increase the risk." She added that most insurers have a two-year suicide exclusion policy, during which time no claims will be paid if the death is the result of suicide.

Lawyer worries it could discourage treatment

Mulqueen said she's concerned that the practice of excluding people from insurance coverage based on mental illness could discourage people from seeking help.

Pugh said if he hadn't sought help for his mental illness, there would be no medical record of it, and he believes his application would have been approved.

"To me that's scary," he said. 

"You're gonna have people that don't go to their doctor and don't speak out and don't take medication and don't do what they need to do to take care of themselves, because they're scared of something like this happening to them in the future."

Mulqueen worries the practice could lead to applicants not disclosing their illness on an application, which could have serious legal implications down the line.

Meanwhile, Sun Life said it has been in touch with Pugh and is "working toward a resolution." Pugh said he still wants to acquire an insurance policy, but it won't be with Sun Life.

"I think at this point, we're probably going to be looking somewhere else," he said.