Mental health and insurance

Is the insurance industry missing the mark when it comes to mental health risks?
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04.The way forward?

Industry super fund REST, in partnership with its insurer, AIA, is one of a number of funds that appear to be taking steps to improve services to members with mental health issues – including special training for call centre staff, according to REST CEO Paul Sayer. “People who’ve had mental health issues have come in to talk about it, and we’ve taken the input on board,” Sayer told us. 

The initiative came about in response to staff not having the skills to appropriately deal with callers in distress, including people in a suicidal state, asking whether their survivors would receive a payout. REST and AIA are part of the SuperFriend project, a collection of industry super funds and group insurers aimed at improving mental health in the workplace, including making sure workers with mental health issues have enough insurance. A related project, SuperMIND, is aimed at better organising claims data in order to develop a “more detailed understanding of the rate, type and reporting of mental illness-related insurance claims”. 


AIA published a report in August 2013 that said group insurers pay out more than $160m a year in mental illness-related income protection and TPD claims. Sayer says REST and other SuperFriend members are making a concerted effort to better understand the complexities of mental health for the benefit of both employees and employers. “The area that we’re paying for in insurance claims is generally around rehab, so we look at how to support people to get them back to work. We’re a mutual, so we’re here to support our members, not find ways to deny claims.” 

And the financial services sector has taken other tentative steps forward. In September last year, for instance, the Financial Services Council introduced a new standard calling for member life insurance providers and their reps to undertake mental health awareness education and training. 

Wright, who has specialised in finding cover for people who have experienced mental illness, says consumers should be careful when relying on insurance inside industry super. “Automatic cover at a minimum level is included, but you should check the fine print. Consumers may be unaware of what they’re getting.” Wright maintains that because commission rates are generally the same across the industry, “brokers wouldn’t have any financial reason to recommend one product over”. However, retail insurance is generally more expensive than insurance provided by super funds, and you can always talk to your fund manager about increasing or changing your cover.


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