The life insurance industry still has a long way to go in improving its understanding and tolerance of mental health issues, according to Mental Health Australia director, policy and projects Josh Fear.
Speaking at the 2017 Financial Services Council Life Insurance Conference in Sydney, Fear said that the number-one request he hears from past or present sufferers of mental illness is for "life insurance companies to meet their legal obligations."
He noted that this issue was publicly explored by the Human Rights Commission back in 1993, and argued that in that time, "it's reasonable for mental health experts to expect the industry had solved these problems by now. But it hasn't."
He said that he's seen life insurance applicants be labelled with a mental illness because they, for example, once sought counselling following a divorce. In other cases, he's seen applicants with one mental illness refused coverage for all other mental illnesses.
"That's like being refused coverage for tuberculosis because you had a cold once," he said.
While Fear said he understands the need for life insurers to discriminate based on disability, mental or otherwise, this should only be done to the extent that it affects the risk premium. He said that insurers also need to be more transparent in regards to the reasons behind policy decisions as they pertain to mental illness.
This is extremely important not just for the life insurance industry, he added, but for mental health in general: "We never want to see any life insurance products or processes that could discourage people from seeking help."