Life insurers should immediately remove mental health exclusions from all products, according to Beyondblue.

“A number of safeguards are ostensibly in place to ensure people with a mental health condition are given fair and equitable access to insurance products,” it says in a submission to the Parliamentary Joint Committee on Corporations and Financial Services industry inquiry.

“Sadly, the reality is starkly different. Empirical evidence and anecdotal reports demonstrate that many people with a mental health condition experience significant difficulties in obtaining and claiming on different types of insurance products compared with the rest of the population.”

The mental health charity says it partnered with Mental Health Australia to hold a survey on the issue.

Of 424 people questioned, 50% either agreed or strongly agreed it was difficult to obtain insurance due to a mental health condition.

“Among those respondents who had applied for life and income protection insurance, 80% either agreed or strongly agreed it was difficult for them to obtain insurance due to a mental health condition specifically in relation to these products.”

Beyondblue accepts some changes to policy terms and conditions may be acceptable for people who report mental health conditions, but blanket exclusions are wrong.

It is also unacceptable for insurers to apply exclusions based on reported symptoms that may not be associated with mental health conditions.

“This approach would be akin to someone being given an exclusion for brain cancer on the basis of reporting a history of migraine headaches. Insurers also have been known to determine that a person has a mental health condition if they state they have seen a counsellor or psychologist, even if this contact was unrelated to a mental health condition.”

Beyondblue has called for an independent study on mental health prevalence, prognosis, and pricing and actuarial data. This could produce a robust model for Australian insurers.