If you enter a life insurance policy, it’s important to disclose your full medical history including anything mental health related. Otherwise you may find the insurer won’t pay your benefits under your policy, even for non-mental health related conditions.
One in five Australians aged 16 to 85 will experience a mental illness in any year. Even if you’ve never had a mental illness, blanket exclusions for mental health conditions might apply to your life insurance policy, so it’s important to read the fine print.
When you’re filling out a life insurance, income protection or total and permanent disability (TPD) insurance application, insurers generally require that you disclose your medical history. This includes mental health issues such as any episodes of anxiety, depression, stress, or other psychological conditions.
If you disclose that you have received treatment for mental health issues then an insurer may impose a broad exclusion on your insurance policy for any mental health related condition. For example, if you’ve seen a GP or psychologist because you’re feeling stressed or anxious, your insurer might apply this exclusion to your policy.
It’s important you accurately disclose your entire medical history when applying for life insurance, including even minor issues or treatment that occurred a long time ago or has since resolved.
The standard question insurers ask is, ‘Have you ever seen a doctor due to anxiety, depression or stress?’. This broad, open-ended question can make it difficult for anything to come to mind. You’d probably remember any recent mental health treatment and consider a recent issue worthy of disclosing, but what about a simple matter of stress that dates back many years? Or that session you had with a psychologist after your relationship broke down?
It might not seem like a big deal, or it might have slipped your mind, but these small details can be the difference between having a future insurance claim paid or declined - which is why it's so important to provide a thorough mental health medical history, no matter how small or how many years ago the treatment was.
Failure to fully disclosure any mental health issues or treatment can allow insurers to not only deny a claim but also to “avoid” the insurance cover, as if it never existed.
This means an insurer could refuse to cover any claim under the mental health exclusions in the insurance policy, even if it’s completely unrelated to the matter that was not disclosed. This can happen even if your non-disclosure was an innocent oversight.
Take one of our clients, for example, who stopped work due to an inner ear imbalance caused by a failed operation. He made an income protection claim, only to have his policy avoided by the insurer because he’d been diagnosed with a mental health problem many years ago, which he hadn’t disclosed. The fact that he considered his mental health condition had long since recovered did not stop the insurer from rejecting the claim.
This is quite common. A lot of people going through an insurance application process are mindful of their current health, but not so much of their entire medical history. Forgetting a certain period in your life can prove disastrous.
Some insurance policies, particularly travel insurance policies and injury/accident policies, won’t cover you for any claim arising from a mental health condition. That means that even if you have no history of mental health problems, if something were to happen in the future and you needed to take time off work or otherwise claim for a mental health condition claim, you couldn’t.
It’s important that you carefully read the product disclosure statement for your insurance policy and consider what you are and aren’t covered for, and whether your policy covers mental health conditions.
It can pay to shop around to find an insurance policy that does cover you for mental health conditions, if something were to happen in the future.
When you purchase an insurance policy, you deserve disclosure about what that policy covers you for. We have been calling for major industry change to make these pitfalls more transparent for consumers:
If you’re applying for insurance of any kind, the best thing you can do is be aware of the impact your answers can have on future claims. You should also:
While the current system is by no means the best approach, being thorough and honest during the application process will likely help you out in the long run.
Our dedicated insurance claims lawyers will help you lodge and negotiate insurance claims or dispute rejected claims, to ensure you receive your full benefits when you need them the most.
We have lawyers who specialise in a range of legal claims who travel to Australian Capital Territory. If you need a lawyer in Canberra or elsewhere in Australian Capital Territory, please call us on 1800 675 346.
We have lawyers who specialise in a range of legal claims who travel to Tasmania. If you need a lawyer in Hobart, Launceston or elsewhere in Tasmania, please call us on 1800 675 346.