Mental Health Claims: A Growing Concern for Young Adults

4

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.

KPMG's report, "Australia’s Mental Health Check Up," presents data showing a 732% increase in TPD claims in this age group. Mental health issues now account for 36% of claims, a stark rise from 10.1% in 2013. The shift places mental health at the forefront of reasons for early workforce withdrawal.

Men are disproportionately affected, with a 59% greater likelihood of leaving jobs for mental health reasons. This pattern is emerging earlier, with the average age of claimants dropping from 48.8 years in 2013 to 46.5 years in 2022.

CALI CEO Christine Cupitt expressed concern over the trend's broader impact. "The unprecedented number of people leaving the workforce permanently in the prime of their working life has huge implications for them personally, for their loved ones, for our national economy, and for our already stretched government support systems,” she stated.

Australia's life insurers are not only collecting data but are also becoming more involved in addressing mental health impacts. “These are very concerning generational trends that show the frequency and severity of mental ill-health is rising exponentially in our community,” Cupitt highlighted.

The report underscores another finding: white-collar workers have a slightly higher propensity to claim disability benefits due to mental health issues compared to blue-collar peers. Specifically, they are 7% more prone to claim permanent and 14% more likely to request temporary disability.

Briallen Cummings, KPMG Partner, elaborated, “The significant rise in mental health conditions over the past decade is a real concern for the community and this is reflected in the life insurance data shown in our report.” She noted the growing severity and prevalence of these conditions making a tangible mark on societal well-being.

The report also attributes 80% of the decade-long increase in TPD claims to mental health, with annual growth nearing 10%. This far surpasses the 0.5% yearly rise for claims due to physical ailments.

Cupitt mentioned potential consequences for insurance coverage accessibility. "While governments are already thinking seriously about Australians’ mental health, we now have further evidence that our community needs more including a stronger and earlier safety net to keep people from falling through the cracks,” she remarked.

These findings suggest significant challenges and potential shifts in how mental health is managed within the workplace and by insurers. KPMG and CALI's research presents a call to action for enhanced support systems and preventative measures to address the burgeoning crisis.

Published:Friday, 6th Dec 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Calls for Super Funds to Accelerate Mental Health Insurance Claims Processing

11 Jan 2026: Paige Estritori

Consumer advocates are raising concerns over significant delays in processing mental health-related insurance claims by Australian superannuation funds. As mental health conditions become a leading cause of total and permanent disability (TPD) claims, the efficiency of claim processing has come under scrutiny. - read more

Australian Super's Claim Delays Raise Concerns Among Members

03 Jan 2026: Paige Estritori

Australian Super, one of the nation's largest superannuation funds, is facing criticism over significant delays in processing insurance claims, particularly those related to income protection and total and permanent disability (TPD). Members have reported prolonged waiting periods, leading to financial hardships and uncertainty. - read more

Australian Life Insurers Report Significant Profit Increase in June 2025 Quarter

26 Dec 2025: Paige Estritori

The Australian life insurance sector has reported a substantial after-tax profit of $360 million for the June 2025 quarter, marking a significant increase from the $116 million recorded in the same period the previous year. This impressive growth is primarily attributed to a sharp rise in investment income and improved underwriting performance across key product lines. - read more

Rising Mental Health Claims Impact Australian Life Insurance Industry

26 Dec 2025: Paige Estritori

The Australian life insurance industry is witnessing a significant surge in mental health-related claims, reflecting broader societal challenges and increasing awareness of mental health issues. AIA Australia, a leading life insurer, has reported that mental health claims now account for 23% of its total claims, up from 15% in 2014. This trend underscores the growing prevalence of mental health conditions and their impact on individuals' ability to work and maintain financial stability. - read more

Decline in Australian Life and Income Protection Insurance Premiums

26 Dec 2025: Paige Estritori

Recent data indicates a notable decline in life and income protection insurance premiums across Australia, providing consumers with more affordable coverage options. According to the latest Direct Life Insurance Report from Rainmaker Information, direct life premiums have decreased by 7% since 2024. Similarly, direct income protection premiums have seen significant reductions, with average premiums for waiting periods of 30 days and 90 days decreasing by 12% and 13%, respectively. - read more

Australian Life Insurance Premiums Set for 1.7% Growth in 2025

18 Dec 2025: Paige Estritori

According to a recent report by Swiss Re, Australia's life insurance market is projected to experience a 1.7% real growth in premiums in 2025. This anticipated increase is attributed to easing cost-of-living pressures and the repricing of disability income policies. - read more

Click for more Insurance News