Mental Health Claims: A Growing Concern for Young Adults

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

KPMG's report, "Australia’s Mental Health Check Up," presents data showing a 732% increase in TPD claims in this age group. Mental health issues now account for 36% of claims, a stark rise from 10.1% in 2013. The shift places mental health at the forefront of reasons for early workforce withdrawal.

Men are disproportionately affected, with a 59% greater likelihood of leaving jobs for mental health reasons. This pattern is emerging earlier, with the average age of claimants dropping from 48.8 years in 2013 to 46.5 years in 2022.

CALI CEO Christine Cupitt expressed concern over the trend's broader impact. "The unprecedented number of people leaving the workforce permanently in the prime of their working life has huge implications for them personally, for their loved ones, for our national economy, and for our already stretched government support systems,” she stated.

Australia's life insurers are not only collecting data but are also becoming more involved in addressing mental health impacts. “These are very concerning generational trends that show the frequency and severity of mental ill-health is rising exponentially in our community,” Cupitt highlighted.

The report underscores another finding: white-collar workers have a slightly higher propensity to claim disability benefits due to mental health issues compared to blue-collar peers. Specifically, they are 7% more prone to claim permanent and 14% more likely to request temporary disability.

Briallen Cummings, KPMG Partner, elaborated, “The significant rise in mental health conditions over the past decade is a real concern for the community and this is reflected in the life insurance data shown in our report.” She noted the growing severity and prevalence of these conditions making a tangible mark on societal well-being.

The report also attributes 80% of the decade-long increase in TPD claims to mental health, with annual growth nearing 10%. This far surpasses the 0.5% yearly rise for claims due to physical ailments.

Cupitt mentioned potential consequences for insurance coverage accessibility. "While governments are already thinking seriously about Australians’ mental health, we now have further evidence that our community needs more including a stronger and earlier safety net to keep people from falling through the cracks,” she remarked.

These findings suggest significant challenges and potential shifts in how mental health is managed within the workplace and by insurers. KPMG and CALI's research presents a call to action for enhanced support systems and preventative measures to address the burgeoning crisis.

Published:Friday, 6th Dec 2024
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

Clear

Why Delayed Life Milestones Could Widen New Zealand’s Income Protection Gap

11 Jul 2026: Paige Estritori

New Zealand’s younger workers are reshaping the traditional path into insurance. Fresh industry reporting, drawing on Deloitte’s 2026 Gen Z and Millennial Survey and Financial Services Council research, points to a clear shift: many Gen Z and millennial New Zealanders are delaying major life decisions because of financial pressure. Home ownership, starting a family and career changes have long been moments when people reassess life, mortgage and income protection cover. - read more

Why the FMA’s conduct focus matters for life insurance buyers

11 Jul 2026: Paige Estritori

New Zealand’s financial advice sector is heading into a more targeted year of scrutiny after the Financial Markets Authority’s latest conduct priorities highlighted fraud, adviser commissions and complaints handling as areas of concern for 2026/27. For households arranging life, trauma, income protection or health-related cover, the message is practical: the quality of advice, disclosure and record keeping matters just as much as the premium on the page. - read more

What Victoria’s New Building Defect Powers Mean for Strata Communities

11 Jul 2026: Paige Estritori

Victoria has moved another step in its building reform program, with the Building and Plumbing Commission now operating with stronger consumer protection powers and a developer bond scheme scheduled for apartment buildings from 1 July 2027. For strata communities, the announcement is not simply a construction law update. It is a reminder that building quality, defect management and insurance planning are becoming increasingly connected. - read more

Why Policy Details Matter Before a Home Service Claim

11 Jul 2026: Paige Estritori

A recent Australian Financial Complaints Authority decision has delivered a timely reminder for small operators: insurance protection depends on the details being right before something goes wrong. The dispute involved a food delivery business that suffered theft and damage at a site that was not listed on its insurance schedule. - read more

Why Broker Fee Transparency Is Back in Focus for Freelancers

11 Jul 2026: Paige Estritori

Australia’s insurance broking sector is again facing scrutiny over how clearly small business clients are told about broker remuneration. The latest debate follows the release of a draft update to the Insurance Brokers Code of Practice, after earlier recommendations had supported broader disclosure of fees and commissions to individual and small business clients across more insurance products. - read more

Click for more Insurance News