Life Insurance Mental Illness

Find out more about life insurance with coverage for mental illness and compare policies with Savvy today.

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, updated on July 19th, 2023       

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Life Insurance

We’ve partnered with Compare Club to bring you a range of life insurance policies to help you compare them side by side.

Life insurance is an important consideration for anyone who wants to protect themselves and their loved ones financially from a range of different covered events. This can include mental illnesses with some insurers, so if you suffer from a mental health condition such as depression or anxiety, it's important to compare policies carefully to help you find the right one for your situation.

You can do just that through Savvy. You’ll be able to compare policies from a panel of trusted insurers in one place before you buy and consider costs, coverage, additional benefits and more. Whether you're looking for life, trauma, total and permanent disability (TPD) or income protection cover, you can get started with us today.

Can I buy a life insurance policy if I suffer from a mental illness?

You may be able to buy life insurance if you suffer from a mental illness. However, the availability and cost of a policy will depend on factors such as the severity and type of mental illness you have, your treatment history and your choice of insurer. Although mental illness in some form affects millions of Australians, with anxiety and depression being the most common, it may be more difficult to get approved for coverage if you’re currently suffering from a condition such as depression or anxiety.

Those suffering from, and being treated for, a mental health condition may be required to pay more for their life insurance policy due to their increased level of risk (as perceived by insurers) or denied approval for a policy altogether in some cases. Alternatively, there may be special conditions attached to your policy with specific exclusions in areas relevant to your illness. However, some insurers may be able to offer coverage at no added cost for certain conditions.

When applying for life insurance, insurers will usually ask you to disclose any pre-existing medical conditions, which include mental illnesses. You’ll also be required to provide your medical history. Based on this information, your insurer will assess your risk level and determine the cost and coverage of your policy.

It's important to note that different insurers may have different underwriting guidelines for mental illness, and the cost of coverage may vary significantly between providers. Because of this, it’s important to compare policies from a range of insurers, which you can do in one place through Savvy. Consider costs, coverage, additional benefits and more before making your decision.

What can be covered by life insurance relating to mental illness?

The specific areas of mental health which can be covered by a life insurance policy will depend largely on the type of life insurance you’ve chosen to take out. It’s important to understand the differences between each of these types of cover before you buy to help inform your decision on which may be most suitable for your needs. The areas which can be covered by each type of policy are:

  • Life cover: some life cover policies may offer coverage for suicide, but this is typically only outside an initial 13-month exclusion period after you purchase your policy.
  • Trauma insurance: this type of insurance can cover a range of traumatic events, such as a heart attack, cancer or stroke. However, some policies may also cover mental health conditions such as post-traumatic stress disorder (PTSD) or severe depression.
  • TPD insurance: if your mental illness permanently strips you of your ability to work in either your current occupation (Own Occupation) or any position (Any Occupation) relevant to your education, experience and training, you may qualify for a TPD insurance payout, subject to your insurer’s terms and conditions.
  • Income protection insurance: if you’re temporarily unable to return to work due to a covered mental illness, you may qualify for ongoing income protection coverage. This may last for up to five years or until you turn 65.

It's important to note that the specific coverage and benefits of a life insurance policy for mental illness may vary depending on the insurer and the policy. It's essential to read the policy's Product Disclosure Statement (PDS) carefully and compare offers, which you’ll be able to do through Savvy today.

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Common questions about life insurance and mental illness

Can I get approved for a life insurance policy if I have bipolar disorder?

You may be able to get approved for a life insurance policy if you have bipolar disorder, but it’ll ultimately depend on a range of factors, including the severity of your condition and its stability. You may have to pay a higher premium, undergo a medical exam and provide medical records to the insurer to assess your condition's impact on your health (although not all insurers will require you to undertake an exam as a condition of approval).

Will my mental health condition be disclosed to my employer or anyone else if I take out a life insurance policy?

Your mental health condition won’t be disclosed to your employer or anyone else if you take out a life insurance policy. Insurers are bound by privacy laws and can’t share your health information without your consent.

What information will I have to provide my insurer about my mental illness?

You will have to provide your life insurer with detailed information about your mental illness, including your diagnosis, treatment, medication and hospitalisation history (all where applicable). You may also need to provide medical records and other supporting documents to help your insurer assess the risk associated with your specific condition.

How much will my life insurance policy cost if I suffer from a mental illness?

The cost of your life insurance policy may vary depending on several factors, including the following:

  • The severity of your condition
  • Your age
  • Your medical history
  • Your occupation
  • Whether your family has a history of mental illness or other conditions
  • The type of policy you buy
  • Whether you smoke
Does life insurance cover alcohol or substance abuse related to mental illness?

While depression, anxiety and bipolar disorder can all be covered by life insurance on their own, alcohol and substance abuse are typically excluded from life insurance policies.

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Disclaimer:

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.