Life insurance specialist TAL has released a new comprehensive whitepaper on mental health and life insurance to encourage the sector to improve mental health support.
TAL’s latest research reveals an increase in the number of people accessing mental health services and support and openly discussing mental health. However, predictive factors for mental health conditions are not well understood, which could have consequences for the life insurance industry.
“For example, financial hardship is a predictive factor for mental health conditions – so during economic slumps, insurers could theoretically see an increase in claims,” TAL said, as reported by Financial Standard.
Mental health claims account for a larger chunk of claims total compared to other claim types. The average amount paid for total permanent disability (TPD) claims caused by mental health is nearly 65% higher than other claims. In income protection, mental health claims are 70% larger than other claim types.
Workplace stress also has an impact on mental health claims, with bullying being the main cause of making a mental health claim.
TAL recommends changes to product definitions and design, underwriting guidelines, the regulatory structure, and early treatment focused on recovery.
“This whitepaper takes a ‘whole of environment’ approach and examines factors ranging from mental health terminology, diagnosis, and treatment to the way we are designing products, addressing support, and delivering prevention initiatives,” TAL Group chief executive Brett Clark told the Financial Standard.
“The importance of maintaining mental health has been brought into sharp focus over the last year, as evidenced by the Australian government’s additional investment in and support for the mental health of Australians during the COVID-19 pandemic.”
