Inside the rise of mental health TPD claims: a corporate lens

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Total and Permanent Disability (TPD) claims relating to mental health conditions are rising. They’re also growing more complex, taking longer to resolve and placing new pressure on a product that wasn’t originally designed to support them.  

For brokers and employers, that shift has real consequences: more disputes, longer claim timelines and a growing gap between what injured workers need and what the insurance ecosystem currently provides.  

On 26 February, TAL brought together brokers and employers at a dual roundtable in our Sydney and Melbourne offices to look at what’s driving the changes and what this means in practice. 

A product under pressure

TPD insurance was created to protect against physical injury and illness, but mental health conditions now account for a significant share of claims. Admitted claims for mental health conditions have grown substantially over the past three years, while the number of insured lives has stayed relatively flat.1

At our roundtable, TAL’s Phil Mullins (Head of Growth & Wealth Pricing) and Adam O’Farrell (Senior Product Manager) were direct about what that means: without action on product design and sustainability, the gap between what the system promises and what it can deliver will keep widening. 

The drivers go beyond the insurance system itself. Financial stress is widespread, mental health is now the most common reason for a GP visit2, and shifting psychosocial expectations at work are changing how and when people seek help.  

Those forces shape how claims present and how complex they become. For employers with a higher proportion of lower-income workers, the concentration of claims is even sharper.3

The workers compensation connection 

Workers compensation reforms across every state have tightened the criteria for psychological injury claims, with changes including higher thresholds and limits on long-term entitlements.4

Kim Dunne (Head of Group Claims) brought a frontline perspective to the session. Coming to TAL from a workers compensation background, she described what reform looks like in practice: acceptance rates dropping sharply, entitlements cut at the 2.5-year mark in Victoria far more often than before5, and workers with genuine injuries left without income or a clear way forward. 

The result is a growing number of employees caught in a gap, with genuine injuries but no clear path to income or support. For employers, that can translate to extended absences and reduced productivity. 

This is where corporate group insurance offers a different path. It’s an employee benefit – not a fault-based system – and outcomes for claims aren’t contingent on whether work was the main contributing factor. Because the assessment doesn’t include a fault-based system, it removes the blame element, lowers the stigma barrier, and may open the door to earlier intervention for those claims that are accepted. 

Stuart Ackland (Head of Growth & Partnerships) spoke about the role brokers can play in shifting that conversation with employers: helping them see their workplace cover as a genuine support mechanism for their people, not just a product on a policy schedule. 

Managing additional complexity  

Mental health claims are more complex to manage than other claims, and brokers can play a key role in helping their employer clients understand this.  

Non-responsiveness from medical providers, high rates of legal representation, cost of living stress, workers compensation changes and shifting community expectations all add to the challenges emerging in corporate group insurance.  

To illustrate these challenges, TAL’s Natasha Roberts (Head of Claims, Technical & Support) and Glenn Baird (Head of Mental Health) concluded the roundtable by sharing a complex claim scenario that demonstrated the positive difference that early support can make during claims for mental health conditions.  

TAL’s response has been to invest in the capabilities required to manage that complexity as effectively as possible. Our claims consultants now work across an expanding range of disciplines: assessing mental health conditions, supporting vulnerable customers, liaising with treating doctors and interpreting occupational requirements. 

Meeting the challenge head on

Brokers have a real opportunity to help employers understand not just what their cover does, but whether it's designed for the claims environment they're actually operating in. That means having better conversations about benefit design earlier in the relationship, and helping clients see how mental health claims actually present.  

That's where strong partnerships can create lasting value for the people the insurance ecosystem is ultimately designed to protect.

To discuss what these trends mean for your clients, contact your TAL Corporate Partnership Manager. 

Sources

1 APRA. Life insurance claims and disputes statistics, June 2025.

2 Royal Australian College of General Practitioners, General practice: Health of the nation, 2024.

3 CALI and KPMG, Australia’s mental health check up: Retail industry mental health claims research, 2024. TAL Life Insurance contributed to the research.

4 TAL claims data following Victorian workers compensation reform, 31 March 2024. NSW workers compensation legislative amendments, November 2025 and February 2026.

5 TAL claims data following Victorian workers compensation reform.