The current claims trends shaping the future of life insurance

Life insurance as collective confidence 

When you take out a life insurance policy, you join a collective of customers: everyone contributes to ensure that anyone can receive a claim benefit if necessary.  

Some people may never need to claim. For others, the support they receive could be a lifeline during a seriously challenging time. Regardless, everyone gets the confidence of knowing that financial protection will be there for them if life suddenly takes a turn. 
 

The claims landscape is shifting

Across Australia’s life insurance industry, the conditions people are making claims for have been changing significantly.

According to the Council of Australian Life Insurers (CALI), mental health is now the leading cause of Total and Permanent Disability (TPD) claims. One in three TPD benefit payments are for mental ill-health. For Income Protection (IP), this number is one in five.¹ In 2024, life insurers paid over $2.2 billion in mental health-related retail claims, which is almost double what it was five years ago.²

These statistics are reflective of what’s happening in our communities and workplaces. They indicate how Australians are experiencing illness, the ways in which work has changed, and why recovering from mental health conditions often takes longer than from physical injury. 
 

Why this shift matters 

Because life insurance operates on the principle of a shared pool, rising claim costs impact the price and sustainability of cover for everyone.

For insurers, mental health claims present particular challenges. For a start, they’re often reported later than other conditions, reflecting delays in seeking treatment and diagnosis – many Australians wait years before accessing care.³  

What’s more, due to the complexity of medical evidence and eligibility criteria, mental health claims typically take longer to assess. And because recovery is rarely linear, claims management is often complicated by claimants experiencing episodic or recurring conditions. 
 

What we’re doing to support you

To ensure we can continue to provide industry-leading protection and support, we’re actively adapting to these changes. This includes: 

• Dedicated mental health specialists: support customers with complex mental health conditions and help to ensure claims are managed with care and understanding.   
• Expanded recovery support services: allied health professionals contact customers after claim acceptance to understand their individual recovery needs and connect them with appropriate support.  
• A Mental Health Centre of Excellence: provides specialist expertise, supports complex cases, and promotes best practice and innovation across the claims function. 
   

Is your cover still right for you?

As the nature of life insurance in Australia continues to evolve, it’s always a good idea to take stock of your own cover. Your family situation, income, mortgage, or health could all be looking a bit different now – so the cover that made sense years ago might not reflect your current circumstances.

If you have a financial adviser, they can help you review whether your current cover is still the right fit for you. This may include reassessing whether current benefits are still appropriate, adjusting features such as inflation increases, or removing options that are no longer required. In some cases, premiums may also be reassessed if health or lifestyle circumstances have improved. Other adjustments – such as restructuring cover, reviewing waiting or benefit periods, or changing insurance levels – can help to ensure cover remains aligned to individual needs while maintaining appropriate protection.

We encourage you to seek financial advice before making any changes to your cover. And if you have questions about your policy, we’re always here to help.
 

Mental health resources

We remain committed to being there for you when it matters most – and to making sure this commitment is built on a foundation that can last. If you’re experiencing mental health challenges, support is available. You can speak to your GP, or access services such as Beyond Blue or Black Dog Institute.

^{1, 2} Council of Australian Life Insurers, ‘Mental ill health is straining Australia’s safety net - CALI’, 2025.

³ Australian National Survey of Mental Health and Wellbeing; National Mental Health Commission, ‘More people delaying mental health care due to cost: New report on Australia’s mental health system | National Mental Health Commission’, 2025.