Mental Health Claims Surge in Australian Insurance Sector

Understanding the Impact of Rising Mental Health Claims on Insurance Policies

Surge in Mental Health Claims Reshapes Australia's 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 insurance industry is experiencing a significant shift as mental health conditions have become the leading cause of total and permanent disability (TPD) claims.

Recent data from the Council of Australian Life Insurers (CALI) indicates that mental health issues now account for nearly one-third of all TPD claims, marking a substantial change in the industry's claim patterns.

In 2024, life insurers disbursed over $2.2 billion in retail claims related to mental health, a figure that has nearly doubled compared to five years prior. Income protection claims linked to mental health also remain substantial, with $887 million paid out in 2024 alone. This trend underscores the growing prevalence of mental health issues and their profound impact on individuals' ability to work and maintain financial stability.

Particularly concerning is the marked increase in claims among younger Australians. The rate of TPD claims for mental health among individuals in their 30s has risen by more than 700% over the past decade. This surge highlights the urgent need for targeted mental health support and intervention strategies to address the unique challenges faced by this demographic.

Christine Cupitt, CEO of CALI, emphasised the broader implications of this trend, stating, "Australia is reaching a tipping point. The entire safety net, not just life insurance, is under pressure." The escalating number of Australians leaving the workforce permanently due to mental health conditions places a significant strain on the nation's financial safety net and underscores the necessity for comprehensive mental health initiatives.

For policyholders, this evolving landscape necessitates a thorough review of existing insurance coverage. Ensuring that policies adequately address mental health conditions is crucial. Additionally, understanding the terms and conditions related to mental health claims can help individuals make informed decisions about their insurance needs.

In response to the rising claims, insurers are reevaluating their coverage options and claim processes. Some are implementing measures to expedite claim handling and provide more robust support for mental health-related claims. These efforts aim to balance the financial sustainability of insurance providers with the critical need to support policyholders facing mental health challenges.

As mental health continues to play a pivotal role in the insurance sector, both insurers and policyholders must adapt to this changing environment. Proactive engagement, comprehensive coverage, and supportive claim processes are essential to address the growing impact of mental health conditions on Australia's workforce and financial systems.

Published:Tuesday, 2nd Dec 2025
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 Insurance Landscape

02 Dec 2025: Paige Estritori

Australia's insurance industry is experiencing a significant shift as mental health conditions have become the leading cause of total and permanent disability (TPD) claims. Recent data from the Council of Australian Life Insurers (CALI) indicates that mental health issues now account for nearly one-third of all TPD claims, marking a substantial change in the industry's claim patterns. - read more

Businesses Advocate for Reforms Amid Rising Insurance Premiums

01 Dec 2025: Paige Estritori

The Australian Chamber of Commerce and Industry, in collaboration with the Insurance Council of Australia, has released a report highlighting the urgent need for coordinated reforms to address the escalating insurance premiums affecting small and medium-sized enterprises (SMEs). The report underscores that soaring premiums are compelling many SMEs, including beauty salons, to either forgo insurance or reduce coverage, posing significant risks to their operations. - read more

AFCA Determines Home-Based Waxing Salon Is a Business

01 Dec 2025: Paige Estritori

The Australian Financial Complaints Authority (AFCA) recently ruled that a home-based waxing salon operated by a Suncorp customer constitutes a business, not merely a hobby. This decision has significant implications for beauticians managing home-based operations, particularly concerning insurance disclosures and compliance. - read more

ASIC Announces 2025 Focus on Insurance Pricing and Claims Handling

01 Dec 2025: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has unveiled its enforcement priorities for 2025, placing a significant emphasis on insurance pricing practices, claims handling, and complaints processes. This initiative aims to enhance consumer protection and ensure fair practices within the insurance industry. - read more

WFI Insurance's $250,000 Donation Supports Flood-Affected Queensland Farmers

30 Nov 2025: Paige Estritori

In response to the catastrophic flooding that has devastated parts of western Queensland, WFI Insurance has stepped forward with a substantial donation of $250,000 to Rural Aid. This contribution is aimed at bolstering relief efforts for farming communities grappling with the aftermath of the region's most severe floods in half a century. - read more

Click for more Insurance News

Equipment Insurance Articles

What does plant and equipment insurance cover?

Plant and equipment insurance is a specialized form of coverage designed to protect the tools and machinery that businesses rely on for their operations. This type of insurance typically covers various assets, including construction machinery, agricultural equipment, and industrial tools. By safeguarding these critical assets, you can ensure that your business continues to run smoothly even in the event of loss or damage. - read more

The Factors That Affect Plant and Equipment Insurance Premiums in Australia

Plant and equipment insurance is a specific type of policy designed to protect the tools, machinery, and equipment that businesses rely on for their operations. This insurance safeguards against various risks, ensuring that your essential assets are not a financial burden during unforeseen circumstances. - read more

Understanding Plant and Equipment Insurance: A Guide for Small Business Owners

When it comes to running a small business, particularly in sectors like construction, having the right insurance is essential. This is where plant and equipment insurance comes into play. It protects your valuable machinery and tools, allowing you to focus on your projects without the constant worry of potential financial loss. - read more

Is Plant and Equipment Insurance a Legal Requirement for Australian Contractors?

Plant and equipment insurance is a specialized type of coverage designed to protect construction and contracting businesses against financial losses related to their machinery and tools. This includes any equipment used in the delivery of services, such as excavators, cranes, and other vital equipment. In essence, this insurance safeguards your investment, providing peace of mind as you focus on your projects. - read more

What Paperwork is Necessary When Applying for Plant and Equipment Insurance?

In the bustling world of business, safeguarding your assets is crucial. This is especially true for industries reliant on machinery and equipment. One essential type of coverage for such businesses is plant and equipment insurance. It provides financial protection against risks associated with the loss or damage of your essential tools. - read more

Knowledgebase

Insurance Claim:
Notification to an insurance company requesting payment of an amount due under the terms of the policy.