Australia’s life insurers have pledged to strengthen their support for people experiencing mental health challenges through a new industry-wide action plan designed to bring clarity, fairness, and transparency to claims.
The Council of Australian Life Insurers (CALI) announced this week that it will develop a new assessment framework for mental health claims over the next 12 months. The initiative will be shaped in consultation with medical professionals, workplace experts, and industry stakeholders to align disability insurance cover with modern medical evidence and return-to-work practices.
CALI chief executive officer Christine Cupitt said insurers recognise their responsibility in addressing Australia’s growing mental health crisis and aim to ensure customers experience a fair and consistent process, regardless of their insurer.
“We have listened to feedback from customers and consumer advocates who feel the claims process can be more transparent and easier to understand,” Cupitt said. “Our goal is to ensure an experience that is fair, transparent, and consistent for every Australian, no matter which insurer a customer turns to.”
Mental health conditions are now the fastest-growing cause of life insurance claims. Nearly one in two Australians will experience mental ill-health in their lifetime, and four in five workers are concerned that mental health challenges could affect their ability to work or meet financial commitments. Younger Australians are particularly affected, with almost three in five aged 18 to 34 at risk of burnout and one in four reporting severe psychological distress.
Cupitt emphasised that while life insurers would continue to support those most affected by mental ill-health, clearer guidance was needed on the role insurers play.
“Australia is in the middle of a national mental health crisis, and we need to set clear, evidence-based guidance about the support life insurers provide,” she said. “Insurers will always be there to help Australians with severe conditions that prevent them from working, but like the NDIS or workers’ compensation schemes, we can’t be the answer for every case.”
CALI will form an expert panel including medical practitioners, legal specialists, rehabilitation professionals, and people with lived experience to advise on the framework. A three-month consultation in early 2026 will engage consumer groups, mental health advocates, superannuation trustees, and financial advisers.
“Together, the Life Code review and the development of a new disability assessment framework will strengthen how Australians are supported when facing mental health challenges and give Australians confidence that life insurance will be there when they need it most,” Cupitt said.
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