Rising Mental Health Claims Impact Australia's Income Protection Insurance
Understanding the Surge in Mental Health-Related Insurance Claims
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Recent data from the Council of Australian Life Insurers (CALI) reveals a significant increase in mental health-related claims within Australia's income protection insurance sector.
In 2024, mental health conditions accounted for 20% of income protection claims, resulting in payouts totaling $887 million.
This marks a substantial rise compared to previous years, indicating a growing trend that insurers and policyholders must address.
The escalation in mental health claims has placed considerable strain on the insurance industry's financial resources. Christine Cupitt, CEO of CALI, highlighted that the entire safety net is under pressure, with more Australians, particularly younger individuals, leaving the workforce permanently due to mental health conditions. This trend underscores the need for insurers to adapt their policies and support systems to better accommodate mental health issues.
For policyholders, this surge emphasizes the importance of understanding the specifics of their income protection insurance coverage. Ensuring that policies adequately cover mental health conditions is crucial, especially given the increasing prevalence of such claims. Individuals should review their insurance terms and consult with financial advisors to confirm that their coverage aligns with their needs.
In response to the rising claims, some insurers are implementing measures to promote preventative health. For instance, TAL has expanded its Health Sense Plus program to include income protection policies, offering discounts to clients who engage in preventative health activities. Such initiatives aim to encourage policyholders to prioritize their health, potentially reducing the incidence of claims related to preventable conditions.
As mental health continues to be a leading cause of income protection claims, both insurers and policyholders must remain vigilant. Staying informed about policy details, engaging in preventative health measures, and fostering open communication between insurers and clients are essential steps in navigating this evolving landscape.
Published:Thursday, 19th Feb 2026 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
Recent data from the Council of Australian Life Insurers (CALI) reveals a significant increase in mental health-related claims within Australia's income protection insurance sector. In 2024, mental health conditions accounted for 20% of income protection claims, resulting in payouts totaling $887 million. This marks a substantial rise compared to previous years, indicating a growing trend that insurers and policyholders must address. - read more
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