Lockdown and your mental health: How life insurance could help

People in group therapy, potentially through life insurance

As pandemic conditions and restrictions continue to develop across the country, the mental well-being of impacted Australians is becoming a top concern.

This has become more evident in national discussions since early August, when Victoria’s lockdown was reinstated – with even tighter restrictions for metropolitan Melbourne – after a sustained spike in Coronavirus cases.

In an ABC News Breakfast interview this week, deputy chief medical officer professor Michael Kidd recognised the mental and emotional impact of prolonged isolation.

“Please look after each other, please look after your mental health. If you are feeling particularly depressed or anxious as a result of the restrictions which are in place, please reach out to Lifeline, Beyond Blue, the other resources,” he said.

Proactive mental health support through life insurance

This focus on mental health comes alongside the release of 2019 life insurance data from the Financial Services Council (FSC). It confirms mental illness as the highest cause of claims for total permanent disability (TPD) and the third highest for income protection. 

The data shows life insurers paid $1.24 billion in 2019 to more than 9,500 Australians for these kinds of claims. In an effort to reduce this, insurers are proposing a change in legislation which would allow customers to be covered for proactive as well as reactive mental health support. 

“Life insurers would like the option to pay for extra treatment as an early intervention measure. The longer somebody is out of work, the harder it is for them to get back to work,” FSC senior policy manager for life insurance, Nick Kirwan said.

Kirwan noted that if it were to be legislated this move would benefit the financial standing of the life insurance industry, but also improve mental health management and insurance affordability for customers.

“Early intervention helps consumers recover from mental health issues, and consumers that recover quicker in turn help the industry manage its sustainability and affordability – it’s all linked,” he said.

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How is mental health covered under life insurance?

Mental illness can be covered under TPD insurance and income protection. However, you should never assume it’s included – always examine your life insurance policy and PDS before applying. 

And if you’re already with a provider? “Be aware of what you have and what you’re paying for,” Kirwan said. 

“Give your superannuation trustee or life insurance company a call today and make sure the cover you have is right for you.”

If you want to explore your options further, head to Mozo’s life insurance comparison page.