In 2024, life insurers disbursed over $2.2 billion in retail claims related to mental health, almost doubling the amount paid five years prior. Income protection claims linked to mental health also remain substantial, with $887 million paid out in 2024 alone. Notably, the rate of TPD claims for mental health among Australians in their 30s has risen by more than 700% over the past decade.
CALI CEO Christine Cupitt emphasized the strain on the system, stating, "Australia is reaching a tipping point. The entire safety net, not just life insurance, is under pressure." This surge in claims underscores the need for a comprehensive approach to mental health support, integrating insurance solutions with broader healthcare and workplace initiatives.
For policyholders, this trend highlights the importance of understanding the scope and limitations of their income protection and TPD insurance policies, particularly concerning mental health coverage. As the industry adapts to these evolving challenges, consumers should stay informed about potential changes to policy terms and premiums.
Insurers are being called upon to rethink their offerings and develop strategies that address the growing prevalence of mental health conditions, ensuring that the financial safety net remains robust and responsive to the needs of Australians.
