Am I covered for mental health issues? Find out more about travel insurance and mental illness
Mental illness is a broad category that encompasses a variety of conditions including depression, schizophrenia, bipolar disorder, anxiety and stress. It is something of a grey area in insurance, with most insurers choosing not to cover it, or offering cover only under certain conditions. This guide takes a closer look at why it can be so hard to get insurance for pre-existing mental illness, and identifies which insurers currently offer travel insurance for mental illness.
Who covers mental illness?
Most insurers will not cover claims related to mental illness, but there are some who offer varying degrees of cover. According to an investigation conducted by Choice, insurers include:
- CGU, BUPA and InsureandGo. These insurers class mental illness as a pre-existing medical condition. All such conditions are assessed individually and a higher premium may be payable if insurance is offered. First-time episodes are covered, as long as medical documentation is provided to support any claim.
- NRMA and Medibank. These insurers also class mental illness as a pre-existing condition and assess such conditions individually. First-time episodes of mental illness are not covered.
- Cover-More. Cover-More cover some forms of mental illness but a mental health assessment is required and a higher premium may be payable if you’re granted cover.
- AllClear. AllClear provide cover for mental illness but cover is dependent upon a medical screening process.
- Budget Direct and 1st for Women. There is no cover is provided if help has been sought for mental illness in the last five years, even if declared.
How much does it cost?
Those insurers who do cover mental illness will charge a higher premium, due to the higher perceived risk they are assuming. But no two premiums are the same and how much you pay will depend on the insurer, the type and severity of your mental illness and the usual factors that determine the cost of travel insurance which include:
- The level of cover you choose (benefit amounts etc)
- The options you select
- The destination you are travelling to
- Your age and general health
Difficulty in obtaining insurance
People who have or have had a mental illness can encounter difficulty in obtaining all kinds of insurance, not just travel insurance. In 2011, a national depression initiative by beyondblue and the Mental Health Council of Australia (MHCA) surveyed a group of people with mental illness, all of whom had applied for various insurance products in the past. The participants were asked to indicate their level of agreement with the statement "It was difficult for me to obtain insurance because I have or have had a mental illness". Their most common response on a five-point scale (strongly agree, agree, neutral, disagree or strongly disagree) was strongly agree (35%).
How do insurers treat mental illness?
What are pre-existing medical conditions?
A pre-existing medical condition is any medical condition that you are aware of and are taking medication for or have had treatment for in the past, including surgery. Most insurers have a list of pre-existing conditions they automatically cover. These conditions, such as asthma and diabetes, are generally seen as "manageable" and perceived as a low risk to the insurer. Some forms of mental illness such as anxiety and depression may be listed in the product disclosure statement (PDS) as a condition that requires further assessment prior to the issue of a policy. In these cases you may be able to obtain cover by undergoing assessment and paying an additional premium. Insurers also have a list of conditions not covered under any circumstances.
Unfortunately, mental illness features all too often on this list or in the general exclusions. If you’re looking for travel insurance for mental illness, the first place to head is the PDS, where the conditions relating to pre-existing medical conditions can be found.
First episode overseas
While there are a handful of insurers that cover some types of mental illness, one of the biggest financial risks travellers face is lack of cover for first-time episodes, where mental illness has never been previously experienced. This recent case study demonstrates how costly that can be. Susan B was on a gap year holiday in Europe when she suffered an episode triggered by a violent assault that she witnessed. She was unable to continue her holiday due to her condition and when she sought help from a doctor in France, she was diagnosed with an anxiety disorder.
When Susan contacted her travel insurer to seek reimbursement for several thousand dollars she had lost due to curtailed travel arrangements, they told her she was not covered for mental illness. Susan had read the PDS before purchasing her insurance and had noted they did cover mental illness, but she was unaware that this was only for known conditions that were declared and approved and not for first-time episodes.
Important: Please not that the information contained in the table above about travel insurance for mental illness is correct as of 19/11/2015 and is subject to change. Be sure to contact the relevant travel insurance brand to discuss your options before making any decisions.
Australian counselling services for people suffering from mental illness
If you’d like some help or advice, whether insurance-related or otherwise, the following is a list of useful links to organisations who specialise in providing support to those dealing with mental illness.
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