Your mental wellbeing deserves the same protection as your physical health. Some insurers’ claims data show that mental health is among the top reasons for insurance claims, especially under income protection cover. This means many Kiwis receive real financial support when mental illness has affected their ability to work or live normally.
Several insurance plans cover the cost of therapy or psychiatric consultations, while others offer free counselling for you or your loved ones after a major illness, disability, or loss.
But even if mental health cover is limited or excluded in your plan, having the right type of insurance can still protect your emotional stability. Cover for serious conditions, like cancer or permanent disability, can ease financial stress, giving you the space to adjust psychologically and focus on recovery instead of worrying about bills.
Policywise can help you find and compare personal and business insurance options that support mental wellbeing and financial resilience. Whether you’re looking for a plan that includes mental health benefits or one that suits your medical history, we’ll help you choose the best cover.
Learn more about different types of insurance from a licenced financial adviser and see what's best for your circumstances.
Health | Life | Trauma | Total and Permanent Disability | Income Protection
Mental health and insurance claims
According to the 2018 He Ara Oranga: Report of the Government Inquiry into Mental Health and Addiction, 50-80% of New Zealanders will experience mental distress, addiction challenges, or both at some point in their lives.
This growing need for mental health support is also reflected in insurers’ data, which show that many people have received financial assistance when their condition affected their daily life or ability to work.
For instance, AIA New Zealand paid over $25.7 million in mental health-related claims in 2024 alone. Mental health made up 25% of AIA’s income protection and 14% of total permanent disablement (TPD) claims.
The top mental health claims were:
- Depressive disorders (44%)
- Anxiety/panic disorders (14%)
- Post-traumatic stress disorder (4%)
- Chronic fatigue syndrome (3%)
- Chronic pain syndrome (2%)
Most mental health claims (over $17.7 million) were paid to those aged 40 to 59, a time in life when work, family, and financial pressures often peak. Men in this age range made up the majority of claims, receiving over $12 million, while women received over $5.7 million.
Other age groups also received support, with $36,000+ paid to those under 20, $540,000+ to people in their 20s, over $5.2 million to those in their 30s, and over $2 million to those in their 60s.
Source: AIA NZ claims compass #2
Chubb Life also reported a similar trend. In 2024, mental health was one of the top conditions claimed under its income protection cover. The highest proportion of mental health claims came from those aged 40 to 59, showing a pattern similar to AIA’s income protection claims.
Source: Chubb claims statistics 2024
Can insurance help if you already have a mental health condition?
How insurers may regard pre-existing mental health conditions
If you already have a mental health condition, you may still be able to get insurance cover. However, how it’s handled depends on your insurer, the type of policy, and your personal situation. Insurers will look at your medical history, symptoms, and treatment.
Depending on your situation, your mental health condition can be:
- Covered: Your condition may be included, though you might pay a higher premium because of the higher risk of a claim.
- Excluded: Some insurers may not cover claims linked to your existing condition, but they’ll still cover you for other illnesses or injuries.
- Deferred: Your insurer may opt to wait and review your application at a later time.
Meeting claim criteria
You’ll need to meet your policy’s criteria to qualify for a claim. For example, with income protection, you can claim if your mental or physical health condition is severe enough to stop you from working.
Policies may also have exclusions, such as claims involving intentional self-harm. Always read the terms of your policy carefully to understand when you’re eligible to claim.
Cover that still protects your wellbeing
Even if your mental health condition is excluded, having insurance can still support your overall health and wellbeing. It can cover you for other serious conditions, help pay bills, and reduce financial stress that can trigger or aggravate poor mental health. For example:
- Income and mortgage protection covers can provide monthly benefits to ease financial pressure if you can’t work due to illness or injury
- Health insurance can cover private hospitalisation and the cost of major surgeries, giving you the option to avoid long public wait times and get diagnosed and treated faster
- Life cover, critical illness insurance, and disablement cover can provide lump sum benefits that could fund medical expenses and provide financial security for your family during a difficult time.
Insurance plans that provide mental health cover
Many insurance plans include mental health benefits. These can help cover counselling or psychiatric consultations, or provide income if you can’t work because of a mental illness. The type and amount of cover depend on your insurer and policy, but it’s good to know that support is available.
Medical insurance
Several top medical insurance plans provide mental health benefits. These may include:
- built-in or complementary psychologist or psychiatrist consultations (up to policy limits)
- reimbursement for eligible claims (up to policy limits)
- free online mental health sessions
- mental health consultations as part of a specialist consultation benefit add-on.
Income protection and mortgage repayment cover
Income protection and mortgage insurance pay a monthly benefit if you’re unable to work due to a mental health condition, such as depression or anxiety. This can help you manage household expenses and protect your family’s financial stability while you recover.
Some policies also let you add redundancy cover, providing up to six months of payments if you lose your job due to involuntary redundancy. Losing your job is stressful and can affect your mental health. Redundancy insurance can help alleviate financial pressure while you are looking for work, giving you the tools you need to recover emotionally as well.
To make cover more affordable, you may also opt for a mental health limitation. This means you’ll pay a lower premium, but payments for mental health-related claims are capped, typically at two years per policy.
Life insurance
Some of the best life insurance companies provide free mental health counselling that can strengthen your emotional resilience during major life events.
Because mental health cover varies widely between insurers, it’s best to speak with a qualified insurance adviser. Policywise can help you compare plans and find the one that best supports your mental, physical, and financial wellbeing.
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Insurance and counselling benefits
Many personal insurance (life, trauma, TPD, income, and mortgage protection) and business insurance plans include counselling or grief support worth up to $2,500 after a claim. This can help you or your family process loss, manage the stress of illness or disability, or adjust to life changes after a major event.
Insurance can’t take away grief or stress, but it can give you access to the right support when you need it most. If you’d like to know which plans include counselling benefits, talk to Policywise.
Get expert help comparing mental health insurance options
Policywise makes it easy for you to find and compare insurance plans that look after your mental health. If critical illness, injury, disability, or death impacts you or your family, the right cover will help protect your long-term financial and emotional wellbeing.
Policywise is a 100% free service which tells you which health, life, and disability insurance provider best fits your needs. We offer fast, comprehensive, and easy-to-understand comparisons of all leading providers and a simple summary clearly recommending which insurer is best for your situation.
Not all insurance policies are the same. Policywise can help you sort out the duds, avoid the lemons, understand the fine print and exclusions, and get the right insurance for you and your family.
We make the important decision of where to buy your insurance super easy. We’ll answer your questions, provide experienced advice and quotes, and manage all the back and forth throughout the application process. Taking out your cover through us means you'll have our lifetime support and claims advocacy, and we'll help you negotiate a positive outcome at claim time. We can also take care of lodging any claims on your behalf and back you up if the going gets tough.
Check out the reviews on our homepage for how other New Zealanders have found our service, because now is the time to get your personal insurance sorted. Give your family or someone you love the most outstanding financial support possible. Book a 5-minute callback with Policywise today; our service is fast and free.