Life Insurance Online :: News
SHARE

Share this news item!

Surge in Mental Health Claims Reshapes Australia's Life Insurance Landscape

Understanding the Impact of Rising Mental Health Claims on Insurance Policies

Surge in Mental Health Claims Reshapes Australia's Life Insurance Landscape?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Australia's life insurance sector is witnessing a significant transformation, with mental health conditions emerging as the predominant cause of Total and Permanent Disability (TPD) claims.
Recent data from the Council of Australian Life Insurers (CALI) indicates that mental health-related TPD claims now constitute nearly one-third of all such claims, highlighting a profound shift in the factors leading Australians to exit the workforce permanently.

In 2024, life insurers disbursed over $2.2 billion in retail claims associated with mental health, a figure that has nearly doubled compared to five years prior. This substantial increase underscores the growing prevalence and recognition of mental health issues within the community and their consequential impact on individuals' ability to maintain employment.

Particularly concerning is the marked rise in claims among younger Australians. The data reveals that the rate of TPD claims for mental health among individuals in their 30s has escalated by more than 700% over the past decade. This trend suggests that mental health challenges are increasingly affecting the younger demographic, potentially leading to long-term economic and social implications.

Income protection claims linked to mental health also remain significant, with $887 million paid out in 2024 alone. This figure highlights the critical role that income protection insurance plays in providing financial support to individuals unable to work due to mental health conditions.

The surge in mental health-related claims presents both challenges and opportunities for the insurance industry. Insurers are now tasked with reassessing their coverage options, underwriting processes, and support services to better accommodate the needs of policyholders facing mental health issues. This may involve developing more inclusive policies, offering mental health support programs, and collaborating with healthcare providers to facilitate early intervention and rehabilitation.

For policyholders, this trend underscores the importance of understanding the specifics of their insurance coverage, particularly concerning mental health. Individuals should review their policies to ensure they provide adequate protection and consider consulting with insurance advisors to tailor coverage to their specific needs.

In conclusion, the rising prevalence of mental health claims is reshaping Australia's life insurance landscape. Both insurers and policyholders must adapt to this evolving environment to ensure that the insurance safety net remains robust and responsive to the changing health dynamics of the population.

Published:Monday, 26th Jan 2026
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Surge in Mental Health Claims Reshapes Australia's Life Insurance Landscape
Surge in Mental Health Claims Reshapes Australia's Life Insurance Landscape
26 Jan 2026: Paige Estritori
Australia's life insurance sector is witnessing a significant transformation, with mental health conditions emerging as the predominant cause of Total and Permanent Disability (TPD) claims. Recent data from the Council of Australian Life Insurers (CALI) indicates that mental health-related TPD claims now constitute nearly one-third of all such claims, highlighting a profound shift in the factors leading Australians to exit the workforce permanently. - read more
Australian Life Insurers Report Significant Profit Growth in FY25
Australian Life Insurers Report Significant Profit Growth in FY25
26 Jan 2026: Paige Estritori
The Australian life insurance industry has reported a remarkable financial turnaround in the fiscal year 2025, with earnings more than doubling to $360 million, according to the latest figures from the Australian Prudential Regulation Authority (APRA). This 210% increase in profit after income tax marks a significant recovery from previous years' losses and underscores the sector's resilience and adaptability. - read more
Australia's General Insurance Industry Achieves Record $6.1 Billion Profit in 2024
Australia's General Insurance Industry Achieves Record $6.1 Billion Profit in 2024
26 Jan 2026: Paige Estritori
Australia's general insurance sector has reported an unprecedented after-tax profit of $6.1 billion for the year 2024, according to KPMG's General Insurance Insights report. This figure is three times higher than the five-year average of $2 billion, marking a significant milestone in the industry's financial performance. - read more
Australian Insurers' $6.1 Billion Profit Sparks Affordability Concerns
Australian Insurers' $6.1 Billion Profit Sparks Affordability Concerns
26 Jan 2026: Paige Estritori
In 2024, Australia's insurance industry reported an after-tax profit of $6.1 billion, a significant increase from the five-year average of $2 billion. This surge in profitability is attributed to substantial premium hikes and a year with fewer severe weather events. - read more
Rising Insurance Premiums Prompt Calls for Industry Reform
Rising Insurance Premiums Prompt Calls for Industry Reform
26 Jan 2026: Paige Estritori
Recent data indicates a significant rise in insurance premiums across Australia, with home insurance premiums increasing by 16% on average over the past year. Some insurers, such as Kogan, RAC, and Honey, have raised rates by over 30%, leading to growing concerns about affordability for consumers. - read more


Life Insurance Articles

How Life Insurance and Estate Planning Work Together for Your Benefit
How Life Insurance and Estate Planning Work Together for Your Benefit
For many Australian families, the concept of estate planning might evoke imagery of vast wealth and complex legal documents, reserved for the very affluent. However, this misconception overshadows the universal importance of having an estate plan, which at its core, is about ensuring your loved ones are cared for and your wishes are honored upon your passing—even if you don't consider yourself wealthy. - read more
Life Insurance for Young Adults: Why It’s Never Too Early to Get Covered
Life Insurance for Young Adults: Why It’s Never Too Early to Get Covered
Life insurance might not be at the forefront of your mind, especially when you're young and healthy. However, understanding the essence of life insurance early on can significantly impact your financial future and provide much-needed peace of mind. - read more
Understanding Your Insurance Needs at Every Life Stage
Understanding Your Insurance Needs at Every Life Stage
Navigating the complex world of insurance can often feel daunting, but understanding the importance of life stage consideration when choosing life insurance is essential. As we journey through the various chapters of our lives, our financial responsibilities, dependents, and personal circumstances evolve. These changes invariably have significant implications for our insurance needs. - read more
Understanding Life Insurance Needs: A Guide for Australian Families
Understanding Life Insurance Needs: A Guide for Australian Families
Life insurance is a financial product designed to provide peace of mind by offering a safety net for your loved ones in the event of your passing. The primary purpose of life insurance is to ensure that your family is financially protected, allowing them to maintain their standard of living even without your income. - read more
The Impact of Health and Medical History on Insurance Premiums
The Impact of Health and Medical History on Insurance Premiums
Life insurance is a critical component of a sound financial plan. It provides financial security and peace of mind to you and your loved ones, ensuring that they are taken care of in the event of your untimely death. - read more


Start Here

Life Cover Amount:
Postcode:

All quotes are provided free and without obligation by a Specialist from our National Broker referral panel. See our Privacy Statement for more details.


Knowledgebase
Public Liability Insurance:
Insurance which provides protection against liability to third parties.