05.Stats and shopping tips
The MHCA and beyondblue’s 2011
report, Mental Health, Discrimination
and Insurance: A Survey of Consumer
Experiences, makes a strong case that
many people who have experienced
mental illness have also
experienced discrimination at
the hands of the insurance
- 35% of the 424 respondents strongly agreed it was difficult for them to obtain any type of insurance as they had experienced mental illness
agreed it was difficult
to obtain life and
said their application
for income protection
insurance was declined
due to mental
got insurance cover but
either paid more or faced
exclusions for mental
Mental illness is mostly
a no-go zone for travel
insurers. In a recent Financial
Ombudsman Service (FOS) dispute
involving a denied claim, one travel
insurer claimed that mental illness
is the third most common reason
for trip cancellation or disruption.
In our most recent travel insurance
four of the 29 brands surveyed
covered claims relating to mental
illness (such as depression,
anxiety, bipolar disorder and
postnatal depression). These are:
(All but Cover-more are distributed
by parent company CGU).
Providing cover is one thing;
paying claims is another. The
MHCA and beyondblue say they’ve
heard from many travel insurance
customers who’ve seen their
claims rejected because the
insurer categorised symptoms such
as stress, insomnia and fatigue as
individual mental health conditions.
*Cover-more requires documentation and approval of a mental health assessment and will then only waive a mental health exclusion at its discretion if a higher premium is paid.
Insurance shopping tips
- Read the PDS to find out how the insurer describes a mental health condition
or illness and what exclusions, exemptions or extra premiums may apply. If the
information isn’t clear, call the insurer and press for details.
- Avoid filling out online forms. Call the insurer or broker directly so you can
explain your circumstances to a real person.
- Ask the insurer how it defines a mental health condition or illness, since
definitions can vary widely between companies. Some policies may categorise
symptoms such as stress, insomnia and fatigue as mental health conditions. Do
they assume you have a mental illness if you’ve seen a counsellor or psychologist?
- Ask about the data the insurer draws on for the underwriting process.
- Ask for a precise definition of phrases such as “mental health days/absence
- Check the fine print if you change your superannuation account due to
a change of employment. The insurance cover in your new super account may
not allow for mental health claims on any pre-existing health issues. Q-Super,
for example, imposes a two-year exclusion for pre-existing conditions and will
only pay a significantly reduced benefit for pre-existing conditions for the first
seven years of cover.
- Ask the insurer to provide reasons if your application or claim is rejected. If
you are not satisfied, you may be able to lodge a complaint with the FOS and the
Australian Human Rights Commission and seek legal advice through the PIAC.