Mental Health Discount

The Mental Health Discount Option offers you a discount on your premiums if you exclude mental health disorders and conditions from your policy – effectively meaning you will not be able to claim a benefit due to one of these disorders or conditions.

This is generally not built into standard income protection policies and you will receive a discount for removing these conditions from your policy.

Background to this option:

Industry claim statistics on income protection show that over 20 per cent of claims are for mental health conditions. Insurers have added this option to their policies to not only give you a choice in reducing your premiums but to lessen the risk to themselves.

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What options are available?

Currently there are two options available to you if you select this policy option:

Have all mental health disorders specified in the Product Disclosure Statement excluded from your policy.
Include all conditions and disorders in your policy but you will only be able to receive the benefit for a maximum 24 month period.

What is a mental health disorder?

Generally, insurers define a mental health disorder/condition as:

Any disorder classified in the Diagnostic and Statistical Manual of Mental Disorders published by the American Psychiatric Association which is current at the start of the period of disability.

(Zurich Wealth Protection PDS, Part 2 Page 61)

These disorders may include but are not limited to:

  • Stress, including post-traumatic stress
  • psychiatric illness,
  • anxiety
  • depression
  • psychoneurotic, psychotic, personality, emotional or behavioral disorders
  • disorders related to substance abuse and dependency, including alcohol, drug or chemical abuse.

*Please note that some insurers may not include dementia, Alzheimer’s disease or mental disorders caused by head injuries as eligible conditions.

Important to know:

Currently, life insurance companies will generally exclude you from taking out this option if you have a history of mental illness:

Also, if you select this policy option, you will generally not be allowed to remove it from your policy, unless you cancel your existing policy and take out an entirely new policy.

It’s important to consider what excluding mental health conditions from your policy may mean for you and your family.

Other options to saving on your insurance:

Before you consider including this discount as part of your policy, you should consider what other options are available to help reduce the cost of your insurance.

Deciding whether or not to include this discount option may seem like an easy decision in order to save on your premiums. However it is important to understand what excluding mental health disorders from your policy means to you and your family.

Published: August 20, 2015
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