Time to end mental health insurance discrimination

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February 24, 2017

PIAC's Michelle Cohen and Alexis Goodstone at the Parliamentary Inquiry into the Life Insurance Industry.

Speaking at the Parliamentary Inquiry into the Life Insurance Industry today, the Public Interest Advocacy Centre (PIAC) has called for an end to discriminatory policies and practices in the life insurance industry that have led to unfair treatment of people with mental health conditions.

For years, beyondblue, Mental Health Australia (MHA) and the Public Interest Advocacy Centre (PIAC) have urged insurers to stop systemic discrimination against people with mental health conditions.

Discrimination takes various forms including outright rejection of cover on dubious or undocumented grounds, unreasonable terms and conditions including inflated premiums or unnecessarily broad exclusion clauses, and the unfair denial of claims.

‘Since 2012 we have provided legal advice and representation to over 100 people who have experienced discrimination, or otherwise been treated unfairly, by general and life insurance providers on the basis of a mental health condition,’ said PIAC Senior Solicitor, Michelle Cohen.

‘Approximately 75% of our cases relate to life insurance products and the remainder relate to general, and predominantly travel, insurance products.

‘In one case, a policy was cancelled after our client made a claim relating to a serious illness.  The policy was cancelled by the insurer on the basis that our client hadn’t disclosed seeing a psychologist when they applied for the insurance, despite never having been diagnosed with a mental illness, and despite there being no connection between the purported mental illness and the client’s claim.

‘Given that around half of the population will experience a mental illness at some point, if current practices continue, there is a risk that many people will be discouraged from seeking the help they need,’ said Michelle Cohen.

PIAC is calling for:

  • Urgent changes to the Life Insurance Code of Practice to establish processes addressing mental health conditions;

  • Changes to discrimination law to require insurers to be more transparent in their decision-making;

  • Insurers to apply sound and proportionate judgement to individual applications and claims, based on robust and current statistical and actuarial data.

MEDIA CONTACT: PIAC Media and Communications Manager, Gemma Pearce: 0478 739 280.

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