Mental Health & Life Insurance Australia: What You Need to Know
Struggling with mental health? You can still get life insurance. Learn how insurers assess depression, anxiety, and other conditions—plus strategies for approval.
This is general advice only and does not take into account your individual circumstances.
Please read the Product Disclosure Statement (PDS) before making a decision.
Consider seeking personal advice from a licensed financial adviser.
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If you have a mental health condition and you're researching life insurance, you may have encountered discouraging information online. Some sources suggest that any history of depression, anxiety, or psychological treatment will result in automatic decline.
This is not true.
The reality is far more nuanced: thousands of Australians with mental health conditions successfully obtain life insurance coverage every year. What insurers care about is not the diagnosis itself, but rather:
How well-managed is your condition?
How long have you been stable?
What treatment are you receiving?
Are you able to function normally (work, relationships, daily activities)?
Mental health conditions exist on a spectrum. Someone with situational depression following a life event who responded well to short-term treatment is viewed very differently from someone with treatment-resistant bipolar disorder requiring multiple hospitalisations.
Understanding how insurers assess mental health - and preparing your application accordingly - can mean the difference between decline and approval at reasonable rates.
The Australian Mental Health Landscape
Mental health conditions are remarkably common in Australia:
1 in 6 women and 1 in 8 men will experience depression during their lifetime
1 in 3 women and 1 in 5 men will experience anxiety during their lifetime
Depression causes an average of 75.4 days off work per year for those affected
Anxiety causes an average of 53.5 days off work per year
These statistics come from Zurich's Cost of Care Volume 2 (2023) research and highlight an important point: mental health conditions are so prevalent that insurers cannot simply decline everyone who has ever experienced them. Instead, they have developed sophisticated underwriting processes to assess individual risk.
Why the advised channel matters here: APRA's June 2025 quarterly life insurance data shows death-claim acceptance rates of 97.2% via advised distribution channels vs 92.9% via non-advised channels (APRA Life Insurance Claims and Disputes Statistics, June 2025). The 4-percentage-point gap is meaningful for any complex application, and especially for mental-health applications where disclosure framing, evidence packaging, and insurer selection materially shape the outcome.
For detailed cost and prevalence data on specific mental health conditions, visit our Mental Health conditions hub.
How Insurers Assess Mental Health Conditions
When you disclose a mental health condition on your life insurance application, underwriters evaluate several key factors:
1. Diagnosis and Severity
Not all mental health conditions carry the same underwriting weight:
Reason: Suicidal ideation or attempt has longer-lasting impact than crisis intervention for panic
4. Functional Capacity
This is often the most important factor. Insurers want to know:
Employment status: Are you working full-time, part-time, or unable to work?
Time off work: Have you taken mental health-related leave?
Social functioning: Do you maintain relationships and activities?
Self-care: Can you manage daily responsibilities?
Someone working full-time with well-controlled anxiety presents a very different risk profile than someone who has been unable to work for 18 months due to depression.
5. Stability Period
The length of time since your last significant episode or treatment change matters greatly:
Less than 6 months: Likely postponement
6-12 months: Possible approval with higher loading
12-24 months: Good prospects for approval
24+ months: Near-standard rates possible if other factors are positive
Conditions Insurers Assess: A Closer Look
Depression
Prevalence: 1 in 6 women, 1 in 8 men lifetime risk
Recovery Statistics:
Up to 50% recover within first six months
30-50% of those who initially recover will experience relapse
Typical Underwriting Outcomes:
Underwriting outcomes for depression vary considerably by insurer, episode history, stability period, current treatment, and functional capacity. Rather than publish a fixed loading table — which misleads because insurer appetite and individual factors move outcomes more than a generic table can capture — the general pattern we see is:
Single episode, stable 12+ months, working: Life insurance often approved with no or minor loading; Income Protection more commonly attracts a loading or a mental health exclusion.
Recurrent depression, currently stable 12+ months: Loadings increase for both Life and Income Protection; exclusions on Income Protection are common.
Current episode or recently changed treatment: Most insurers will postpone a decision until stability is demonstrated.
Multiple episodes with recent hospitalisation: Decline is common across both Life and Income Protection.
A pre-assessment through an adviser is the only reliable way to gauge insurer appetite for your specific situation before submitting a formal application.
Key Success Factors:
Stable on single medication for 12+ months
No time off work in past 12-18 months
Regular GP or specialist follow-up
No suicidal ideation history (or very distant history)
Prevalence: 1 in 3 women, 1 in 5 men lifetime risk
Recovery Statistics:
50-60% recovery rate
50-66% relapse rate among those who initially recover
Typical Underwriting Outcomes:
Insurer outcomes for anxiety disorders vary by diagnosis, severity, stability period, and functional capacity. The general pattern we see across panel insurers:
Well-controlled GAD on stable SSRI therapy, working full-time: Life insurance often approved with no or minor loading; Income Protection more commonly attracts a loading.
Panic disorder, controlled 12+ months: Loadings are larger than for well-controlled GAD, and Income Protection outcomes are more variable across insurers.
Multiple anxiety disorders, frequent GP visits: Loadings on both Life and Income Protection are material; mental health exclusions on Income Protection are common.
Severe anxiety preventing work: Decline is common across both Life and Income Protection.
Key Success Factors:
Well-controlled on low-dose medication
No panic attacks in 12+ months
Able to maintain employment
No agoraphobia preventing normal activities
For detailed information on anxiety costs and statistics, see our Anxiety condition page.
Bipolar Disorder
Bipolar disorder presents more challenges than depression or anxiety, but coverage is still possible.
Typical Underwriting Outcomes:
Bipolar disorder outcomes vary substantially by type (Bipolar I vs Bipolar II), stability period, hospitalisation history, and medication compliance. The general pattern:
Bipolar II, stable 2+ years, working, no hospitalisations: Life insurance is commonly approved with a material loading; Income Protection is frequently declined or excluded for mental health.
Bipolar I, stable 3+ years, employed, on mood stabiliser: Larger loadings on Life; Income Protection usually declined.
Recent manic or depressive episode: Decline is common across both.
Multiple hospitalisations in the past 5 years: Decline is common across both.
Key Success Factors:
Bipolar II (less severe) more likely to be accepted than Bipolar I
Extended stability period (2-3+ years minimum)
Excellent medication compliance
Demonstrated employment stability
No substance use issues
Post-Traumatic Stress Disorder (PTSD)
PTSD underwriting depends heavily on the cause and current functioning:
Typical Underwriting Outcomes:
PTSD underwriting outcomes depend heavily on the trauma type, treatment completion, time since the event, and current functional capacity. General pattern:
Single trauma, treated, stable 2+ years: Life insurance is commonly approved with a loading; Income Protection often attracts a loading or mental health exclusion.
Complex PTSD, ongoing treatment, functional: Larger loadings on Life; Income Protection frequently declined.
Combat-related PTSD, stable 3+ years: Loadings on Life are material; Income Protection usually carries a mental health exclusion.
Active symptoms affecting work: Postponement on Life; Decline on Income Protection.
Key Success Factors:
Time since traumatic event and treatment
Response to treatment (therapy completion)
No related substance use
Demonstrated functional recovery
Worried About Applying with Mental Health History?
Our specialist advisers work with mental health cases daily. Get honest assessment of your insurability before formal application.
When you apply for life insurance with a mental health history, be prepared to provide detailed information. Gathering this documentation before you apply speeds up the process and demonstrates organisation.
Standard Questions You'll Be Asked
Diagnosis details:
What condition(s) have you been diagnosed with?
When were you first diagnosed?
Who made the diagnosis (GP, psychiatrist, psychologist)?
Treatment history:
What medications have you taken (past and current)?
Current medication name, dose, and duration on current dose
Therapy type and frequency
Name of treating practitioners
Hospitalisation:
Have you ever been hospitalised for mental health reasons?
Was admission voluntary or involuntary?
Dates and duration of hospitalisation(s)
Reason for admission
Crisis history:
Any history of suicidal thoughts or self-harm?
Any suicide attempts?
When did these occur?
Functional impact:
Time off work due to mental health?
Current employment status?
Any limitations on activities?
Current status:
When did you last see your treating practitioner?
Current symptom level (none, mild, moderate, severe)?
Any treatment changes planned?
Medical Evidence You May Need to Provide
Depending on your condition severity, insurers may request:
GP medical report: Summary of your mental health history
Psychiatrist report: If you see a specialist
Treatment records: Therapy notes or medication history
Hospital discharge summaries: If applicable
Pro Tip: Request a "medical report for insurance purposes" from your GP before applying. Having this ready can reduce underwriting time from weeks to days.
Timing Your Application
When you apply matters almost as much as what you disclose. Strategic timing can significantly improve your outcome.
Best Times to Apply
After 12+ months of stability: No medication changes, no significant symptoms, no time off work
Following successful treatment completion: If you've finished a course of therapy
When you're employed and functioning well: Employment demonstrates stability
Before adding additional medications: New medications restart the stability clock
Worst Times to Apply
During a medication change: Insurers will postpone until you're stable on the new medication
Within 6 months of a crisis or hospitalisation: Almost certain decline or postponement
While on sick leave for mental health: Wait until you've returned to work
During a relapse or symptom flare: Wait until stable again
The 12-Month Benchmark
Many insurers use 12 months as a common benchmark for stability, though the exact period varies by insurer and by condition. This typically looks like:
12 months since the last episode or symptom flare
12 months on the current medication without changes
12 months since the last mental health-related time off work
If you're close to this threshold, waiting a few months before applying can significantly improve your outcome.
Income Protection vs Life Insurance for Mental Health
This distinction is crucial: mental health affects these two insurance types very differently.
Why They're Treated Differently
Life Insurance assesses mortality risk - will you die prematurely?
Mental health conditions have some correlation with mortality (mainly through suicide risk)
But the correlation is less direct than conditions like heart disease
Income Protection assesses morbidity risk - will you be unable to work?
Mental health conditions are a leading cause of disability claims
Depression and anxiety account for a large portion of IP claims
Insurers have experienced significant losses from mental health IP claims
What This Means for You
You may experience very different outcomes for each cover type:
Scenario: Well-controlled depression, stable 18 months, on SSRI
Cover Type
Likely Outcome
Life Insurance
Commonly approved with no or minor loading
TPD Insurance
Commonly approved with a loading; mental health exclusion possible
Trauma Insurance
Commonly approved with mental health conditions excluded
Income Protection
Typically attracts a loading and a mental health exclusion
Strategic Considerations
If your primary concern is protecting your family with a death benefit:
Focus on Life Insurance and TPD
Income Protection may be harder to obtain
If Income Protection is essential:
Consider longer waiting periods (reduces premium and may improve acceptance)
Accept mental health exclusion to get other coverage
Look at group IP through superannuation (often auto-acceptance)
Disclosure Requirements: Be Honest
This cannot be emphasised enough: full, honest disclosure is essential.
Why Disclosure Matters
Non-disclosure is the single most common reason insurance claims are denied. When you make a claim, insurers have the right to:
Access your Medicare records (MBS/PBS data)
Request full medical history from GPs and specialists
Investigate any inconsistencies
If they discover you didn't disclose relevant information, they can:
Deny your claim entirely
Void your policy from inception
Keep all premiums you've paid
What Must Be Disclosed
You must disclose:
All diagnosed mental health conditions (even if you think they're resolved)
All medications taken in the past 5-10 years (depending on insurer)
All mental health consultations (GP, psychologist, psychiatrist)
Any hospitalisations or crisis interventions
Any thoughts of self-harm or suicide (even if never acted upon)
Any substance use issues
Common Disclosure Mistakes
"I stopped taking medication, so I don't have depression anymore"
Wrong. You must disclose the condition and treatment history.
"It was just work stress, not real depression"
If a GP diagnosed you with depression or anxiety and prescribed medication, you have a diagnosable condition.
"That was 10 years ago and I'm fine now"
Older conditions are viewed more favourably, but must still be disclosed.
"My psychologist visits were for coaching, not mental health"
If you saw a psychologist or psychiatrist, disclose it. Let the insurer determine relevance.
How to Present Your History Positively
Disclosure doesn't mean presenting yourself in the worst possible light. You can:
Emphasise stability and recovery
Highlight treatment compliance and engagement
Provide context (e.g., "situational depression following divorce, now resolved")
Include supporting letters from treating practitioners
Document return to full functioning
Need Help with Your Application?
A licensed adviser experienced with mental health applications can help present the history accurately while maintaining full disclosure. Free guidance available.
If possible, work toward the best possible mental health profile before applying:
Achieve 12+ months of stability
Demonstrate medication compliance
Maintain regular practitioner appointments
Return to full work capacity
Address any substance use issues
2. Gather Supporting Documentation
Compile before applying:
GP summary letter emphasising stability
List of all medications with dates
Evidence of treatment compliance
Letter from treating specialist (if applicable)
Evidence of return to work (if previously off)
3. Work with a Specialist Adviser
An adviser experienced with mental health cases can:
Identify which insurers are most mental health-friendly
Pre-approach insurers anonymously to gauge appetite
Present your case in the most favourable light
Negotiate with underwriters
Find alternatives if standard cover isn't available
4. Consider Pre-Assessment Screening
Some brokers offer anonymous pre-submission to insurers (Stage 3.5 approach):
Tests insurer appetite before formal application
Identifies potential issues to address
Avoids declined application on record
Reduces rejection rates significantly
5. Be Prepared to Accept Exclusions
Sometimes the best outcome is approval with exclusions:
Mental health exclusion on Income Protection
Specific condition exclusions on Trauma
This still provides valuable coverage for other events
6. Compare Multiple Insurers
Underwriting approaches vary significantly between insurers:
Some are known for being mental health-friendly
Others have conservative policies
Premium loadings can vary by 50%+ for identical cases
Example: One insurer may decline someone with bipolar disorder, while another offers terms with a material loading.
What If You're Declined?
Decline isn't necessarily permanent. You have options:
1. Understand Why You Were Declined
Request written explanation from the insurer. Was it:
Recency of diagnosis/treatment?
Severity of condition?
Time off work?
Specific concerning factors (hospitalisation, suicidal history)?
2. Address the Issues
Based on the decline reason, take action:
Wait until you have longer stability period
Return to work if you're currently off
Demonstrate consistent treatment compliance
Allow more time since hospitalisation
3. Reapply to a Different Insurer
Different insurers have different policies. What gets declined at one may be accepted at another.
4. Consider Alternative Coverage
If fully underwritten cover isn't available:
Group insurance through super: Often auto-acceptance up to certain limits
Guaranteed acceptance products: No medical questions but higher cost
Reduced coverage amounts: May be accepted for smaller sums
5. Work with Specialist Adviser
An adviser experienced with declined cases can:
Navigate the appeals process
Identify alternative insurers
Develop strategy for future reapplication
Frequently Asked Questions
Can I get life insurance if I take antidepressants?
Yes. Antidepressants are commonly prescribed in Australia. Insurers will assess based on the underlying condition, stability, and how well controlled you are on medication. Many people on stable SSRI therapy are approved with minimal or no loading.
Will seeing a psychologist affect my insurance application?
Seeing a psychologist or psychiatrist must be disclosed, but it's generally viewed positively. It shows you're actively managing your mental health. What matters more is the underlying condition and your current functioning.
Do I need to disclose mental health conditions from my teenage years?
Yes, you should disclose significant mental health conditions from any time in your life. However, conditions from many years ago that have been resolved are typically viewed much more favourably than recent issues. An episode of depression at 16 that resolved with treatment and hasn't recurred in 15 years would likely have minimal impact on a 31-year-old's application.
Can I get Income Protection with anxiety or depression?
It's possible but more challenging than Life Insurance. Many people with stable, well-controlled anxiety or depression are approved for Income Protection, though often with:
Higher premium loadings
Mental health exclusions
Longer waiting periods
What happens if my mental health worsens after I get insurance?
Once your policy is in force, you cannot be declined or have your premium increased due to changes in your mental health (except for stepped premium increases based on age). This is why getting insurance while you're stable is so important - it locks in your coverage.
Should I wait until I'm completely off medication to apply?
Not necessarily. Being stable on medication is often viewed more favourably than:
Recently stopping medication (insurers worry about relapse)
Never having received treatment (condition may be unmanaged)
If you're stable on medication with no plans to change, that can be a good time to apply.
How long do I need to wait after a psychiatric hospitalisation?
Most insurers require at least 12-24 months since discharge before they'll consider an application. Some may require longer for multiple hospitalisations or involuntary admissions. The longer ago the hospitalisation and the better your subsequent stability, the more favourably it will be viewed.
Will applying for life insurance affect my access to NDIS or government support?
No. Applying for or holding private life insurance does not affect your eligibility for NDIS, Disability Support Pension, or Medicare. These are separate systems. Your insurance policy and any benefits paid out under it (death benefit, terminal illness benefit, TPD payout) are also generally not assessed as income for Centrelink purposes in the same way as employment income — though the rules are complex and case-specific, and lump sums can affect asset tests. For specific advice on how an insurance payout would interact with your benefits, speak to a qualified financial counsellor or contact Services Australia directly. Free financial counselling is available through the National Debt Helpline on 1800 007 007.
What if I'm worried disclosure will affect my employment or future medical care?
Insurer assessment of mental health is strictly confidential and cannot be shared with employers. Insurers operate under the Privacy Act 1988 and Insurance Contracts Act 1984 — your application is shared only with reinsurers, the insurer's medical officer, and (with your specific consent) any treating practitioners providing reports. It is not shared with your employer. Disclosure on an insurance application is also not the same as making a workers compensation claim or recording the condition in a workplace incident system.
If you've been concerned about applying because of perceived employment stigma, this is a separate concern from underwriting. The Fair Work Act 2009 protects employees from discrimination on the basis of mental disability. Insurance disclosure does not create a record visible to your employer.
Where Mental Health Fits in the Broader Underwriting Picture
Mental health is one of many conditions insurers assess, but it has a distinct underwriting profile because its prevalence is high, its impact on Income Protection claims is significant, and the assessment relies more on stability narrative than on biomarkers. For a wider view of how the panel handles other categories of pre-existing condition, see:
The brokerage works across 9 panel insurers (AIA, Zurich, TAL, OnePath, ClearView, NEOS, Encompass, Acenda, Futura). Insurer appetite for mental-health applications varies meaningfully across this panel — pre-assessment lets your adviser identify which insurers are showing willingness for your specific profile before submitting a formal application, which avoids a declined application appearing on your record.
Conclusion
Mental health conditions are common, affecting millions of Australians. Life insurers have developed sophisticated approaches to assessing mental health risk, and many people with depression, anxiety, and other conditions successfully obtain coverage.
The key factors that determine your outcome are:
Stability: How long you've been stable on current treatment
Functioning: Whether you're working and managing daily life
Treatment compliance: Engagement with prescribed treatment
History: Severity and recency of episodes
Insurer choice: Different insurers have very different approaches
If you have a mental health condition and need life insurance:
Don't assume you'll be declined
Disclose fully and honestly
Time your application for when you're most stable
Work with an adviser experienced in mental health cases
Compare multiple insurers
Protection for your family is often still achievable - it may just require more careful navigation.
Get Your Mental Health Insurance Assessment
Our specialist advisers understand mental health underwriting. Get honest advice on your insurability and the best path forward.
Cost estimates are from Zurich Cost of Care Volume 2 research and represent averages. Your actual costs may vary.
Insurance coverage recommendations are general in nature. This is general advice only and does not take into account your individual circumstances. Speak with a licensed adviser to determine appropriate coverage for your situation.