Seeking insurance cover is an ordeal for people with mental health conditions

13 December 2017

Broad and blanket insurance cover exclusions for people with mental health conditions are “unfounded, ridiculous, discriminatory and unfair”, Beyond Blue Clinical Advisor Dr Stephen Carbone says.

Speaking on ABC Radio National’s Life Matters, hosted by Amanda Smith, Dr Carbone questioned how insurance companies assess risk when a person with a mental health condition applies for cover.

“We don’t believe the products are actually based on the facts,” Dr Carbone said. He said insurers were legally bound to make decisions on “robust statistical data or actuarial data”.

“We believe the products are being based on false assumptions about the nature of mental health conditions and the risk of a person becoming unwell or staying unwell.”

Ms Smith also spoke to Brad Aleckson who recently sought a range of insurance cover but was rejected, a woman named Sarah who spoke of her experience in claiming travel insurance after a trip to Thailand, and Financial Services Council Insurance Policy Consultant Nick Kirwan.

AMANDA SMITH: First up we're joined by Brad Aleckson. He's 20 and he lives on the Gold Coast. Now Brad you recently sought life insurance, income protection and total and permanent disability insurance. What happened?

BRAD ALECKSON: Yeah that's correct. So I applied for life insurance. I applied for the works, so life, TPD, trauma and income protection. I went through the whole process. There was no dramas. I went through the sort of medical, and depression came up and I didn't really think anything of it, like, you know it might be an exclusion they put on it. They had to get further medical reports from my GP and then I heard back, it would have been a month or two (later), and they fully declined any insurance cover.

AMANDA SMITH: So tell me about your mental health issues background.

BRAD ALECKSON: So it's been an on and off battle with me the last two or three years throughout university. I guess it was a combination of different events, a complete change in lifestyle, moving out of home and I had a sporting injury surfing. I actually dislocated my knee. And it was a repeated event, it happened three times. During that time it was, you know, in and out of going from recovery to rehab, recovery rehab. I finally got surgery on it and then everything was going all well and good. And then earlier this year around May, I guess a lot of pressure got to me, first year out of uni, full time work, and I just wasn't dealing with this pressure and stress. I just want to emphasize that it wasn't a particular event, it was mainly my mindset and what I perceive these events to mean.

AMANDA SMITH: So were you, in your view, justified for being knocked back on these insurances?

BRAD ALECKSON: I don't believe so because there was no remedy or alternatives offered to me. It was just a straight up no. I would have been happy to take an exclusion around mental health because I'd much rather have the cover and be covered for events. And insurance is there to cover you from unexpected events. So I fail to see any sort of correlation between mental health and an unexpected event happening to me, whether that's a heart attack or I'm unable to work for whatever reason.

AMANDA SMITH: Yeah physical accident or whatever. So Brad if you hadn't sought treatment for your depression, would you actually have been able to get that insurance?

BRAD ALECKSON: Yeah I believe so because it would have been an undiagnosed problem and then it wouldn't have brought any attention from the insurer and I'm sure they would have happily proceeded with it.

Listen to the interview audio or read the full transcript