Hello Fellow Investors,
Mental health problems are now one of the largest contributors to claims for Income Protection and Total and Permanent Disability (TPD) insurance.
Dealing with a mental health condition such as an anxiety or depression is difficult enough – but what happens when it impacts you to the extent that you can’t work? No wonder we commonly hear questions such as:
- Does income protection cover mental illness?
- Can I make a TPD claim if I’m diagnosed with severe anxiety or depression?
- How do insurers assess mental health claims?
The good news is that in many cases, the answer is yes. If you’ve been diagnosed with a mental health condition, you may be able to claim on your policy – though there are some important factors to be aware of.
Mental Health and Insurance Claims
For TPD claims, mental health issues account for one-third of all claims, while for Income Protection, they represent roughly one-fifth. Because of this trend, underwriters have become much more cautious when assessing applications where you may have disclosed mental illness in your medical history.
At our Brisbane financial planning firm, we’ve seen how mental health is the most common pre existing condition that’s excluded on new insurance policies. As with any type of cover, the best time to take out insurance is while you are in good health – and that includes your mental health.
When Can you Claim?
For anxiety or other mental health conditions to qualify you as unable to work under Income Protection or TPD, it would generally mean that:
- Your ability to concentrate is significantly impaired; or
- You struggle with social interactions, such as communicating with clients or colleagues; or
- You have difficulty leaving your home, driving, or commuting on public transport due to your anxiety, and this impacts your capacity to perform the duties of your occupation.
Unfortunately, claims are not always approve in a timely manner, as reported by the ABC in July 2025 – which can only add to the individual’s psychological distress.
Getting the Right TPD and Income Protection Insurance
If you’ve ever wondered: Does income protection cover mental illness, the key takeaway is that it often can; however exclusions and conditions may apply. To make sure you have the right level of protection, it’s important to get advice before taking out a policy.
Our Personal Insurance Made Simple service can help you understand your options and secure cover that works for your needs, giving you peace of mind for the future. Call 3391 7342 to book an appointment with our Brisbane financial planner today.
Joshua Napier (Associate)