The Life Code Compliance Committee conducted a review of six insurers, representing 78% of income protection and total and permanent disability covers. The investigation found that while two insurers fully complied with the code by not imposing blanket mental health exclusions, the remaining four still embedded broad exclusions in their standard policy terms.
One insurer, for instance, excluded coverage under an income protection policy for "any mental disorder" without qualification. Such practices not only breach the code but may also violate the Disability Discrimination Act 1992, which prohibits discrimination based on disability.
The committee emphasized that underwriting must be fair, evidence-based, and personalized, avoiding broad or automatic exclusions for customers with mental health conditions. Insurers are expected to design and underwrite their products in a manner that treats each customer's circumstances fairly.
Christine Cupitt, CEO of the Council of Australian Life Insurers, acknowledged the need for improvement in this area, stating that it's crucial for customers to be treated fairly and transparently, regardless of their condition or injury.
For policyholders, this development underscores the importance of thoroughly reviewing insurance policies to ensure they provide adequate coverage for mental health conditions. It's advisable to consult with insurance providers or seek professional advice to understand the specifics of policy terms and any exclusions that may apply.
In conclusion, the persistence of blanket mental health exclusions among some Australian life insurers highlights the need for ongoing scrutiny and reform. Ensuring fair and inclusive coverage for mental health conditions is essential for the industry's integrity and the well-being of policyholders.
