Will Mental Health Affect Your Life or Income Insurance Application in NZ? (2026)

Anxiety, depression or counselling on your record? Here is how NZ insurers underwrite a mental-health history, why severity and recency matter, and how to get the fairest outcome.

If you have ever seen a counsellor, taken an antidepressant, or talked to your GP about anxiety, you may worry that telling an insurer will block your cover. It is one of the most common reasons people put off applying — or quietly leave something off the form. Neither helps. A mental-health history is one of the most ordinary things insurers underwrite, and in most cases it is workable. But how you disclose it, and how the application is put together, genuinely affects the result.

This guide explains what you have to disclose, how New Zealand insurers actually assess a mental-health history, when it leads to a loading, an exclusion or a decline, and how an adviser puts a disclosure in the best possible light.

TL;DR: A mental-health history rarely blocks cover, but it commonly affects the terms. Around half of New Zealanders may struggle with their mental health at some point ¹, so insurers underwrite it routinely. Outcomes range from standard terms to a loading, a temporary or permanent exclusion, or a deferral — driven mostly by severity, recency and treatment. How it is disclosed matters.

Do you have to disclose anxiety, depression or counselling?

Yes. When you apply for life, trauma, total and permanent disability (TPD) or income protection cover, you have a legal duty to disclose everything an insurer would reasonably want to know — and that includes mental-health history. This means past or current diagnoses of anxiety, depression, stress or other conditions; counselling or psychology sessions; antidepressants or other medication; time off work; and relevant GP visits, even where nothing was formally diagnosed.

It can feel intrusive, and it is reasonable to ask why a few counselling sessions years ago should matter. But the duty of disclosure is not about judging you. It exists so the insurer can price the policy on accurate information — and so a claim is not disputed later on the grounds that something material was left out. Leaving a condition off the form to "keep it clean" is the riskiest thing you can do: it can give the insurer grounds to decline a future claim or void the policy, sometimes for a claim entirely unrelated to mental health. We cover how that plays out in non-disclosure and life insurance claims.

The practical takeaway is straightforward. Disclose fully and accurately, with dates and detail where you can, and let the underwriting process do its job. A disclosed condition that affects your terms is almost always a better position than an undisclosed one that threatens a claim.

How do NZ insurers underwrite a mental-health history?

Underwriting is the process an insurer uses to decide whether to offer cover, and on what terms. For a mental-health disclosure, it follows a fairly consistent path. You disclose the history on the application. The underwriter weighs the severity and recency. They look at whether you are currently in treatment, recovered, or somewhere in between. Often they request a report from your GP or treating clinician to confirm the detail. Then they reach an outcome.

!Process flow showing how a New Zealand insurer assesses a mental-health disclosure: it moves from disclosure, to severity and recency, to treatment status, to a GP or specialist report, to one of four outcomes — standard terms, a loading, an exclusion, or a deferral.

Figure: How NZ insurers assess a mental-health disclosure. The path runs from disclosure, through severity and recency, treatment status and a GP or specialist report, to an outcome of standard terms, a loading, an exclusion or a deferral. Source: general NZ insurer underwriting guidance — each insurer assesses on individual circumstances, and any outcome depends on the specific policy terms, exclusions, stand-downs and underwriting.

A few things help to know going in. Underwriters are not looking for a reason to say no; they are pricing risk, and mental health is risk they see constantly. A diagnosis many years ago that was mild, treated and resolved looks very different to an active, severe condition with recent time off work. And the report from your GP is usually the deciding document — which is why it matters that your record is accurate and that the insurer reads it in context rather than from a one-line tick on a form.

Why does this come up so often? Because mental-health conditions have become a leading driver of insurance claims in New Zealand, not just applications. A 2025 analysis of one large independent adviser's book found mental health made up 32% of income protection claims, against an estimated industry benchmark of around 20% ³. AIA New Zealand reported that mental health represented 25% of its income protection claims and 14% of its TPD claims in 2024 ⁵. Insurers underwrite mental health carefully precisely because they pay a lot of these claims.

Will it mean a loading, an exclusion, or a decline?

There are four common outcomes, and most disclosures land in the milder end of the range. It helps to know what each one means before you apply, so an offer with terms attached does not come as a surprise.

Figure: Common underwriting outcomes for a mental-health disclosure in NZ. Source: general NZ insurer underwriting practice — illustrative only; your outcome depends on your circumstances and the specific policy.

A few points worth holding onto. An exclusion is not the same as a decline — you still get life cover, income protection or trauma cover; it simply will not pay for claims caused by a mental-health condition. For many people that is an acceptable trade to get the rest of the protection in place, and as you will see below, an exclusion can often be revisited later. A loading keeps you fully covered, including for mental health, at a higher price. And a deferral is not a no; it is a "not yet", usually with a clear path back once things have settled.

Outright declines are the least common result, and they tend to involve severe or active presentations rather than a historic, treated episode. We go deeper on how these terms work, and how they are priced, in insurance loadings and exclusions.

How does severity, recency and treatment affect the outcome?

These three factors do most of the work in an underwriter's decision, so it is worth understanding each.

Severity. A single episode of situational stress — say, after a bereavement or a tough patch at work — is treated very differently to a long-running, severe condition with hospitalisation or self-harm history. Insurers distinguish between conditions by type and intensity. Among AIA New Zealand's 2024 mental-health claims, depressive disorders were the most common at 44%, followed by anxiety and panic disorders at 14%, then PTSD at 4% ⁶. Milder, well-managed presentations of common conditions are the most likely to attract standard or lightly loaded terms.

Recency. Time matters, often more than people expect. A condition that was diagnosed and resolved several years ago, with no recurrence and no current medication, is a far easier risk than one being actively treated today. As a rough guide, the further back a resolved episode sits, the closer to standard terms you are likely to get. Recent or current treatment is more likely to bring a loading, an exclusion or a deferral until things stabilise.

Treatment status. Counter-intuitively, being in treatment is usually viewed positively, not negatively. Someone who saw a counsellor, followed through, and is now stable presents better than someone who declined help and remains unwell. Engagement with treatment, a stable medication regime, and a good report from your GP all point towards a more favourable outcome. Insurers want to see a condition that is understood and managed.

Working age is also relevant, because that is when income protection claims concentrate. AIA New Zealand customers aged 40–59 accounted for $17.7 million of its mental-health claims in 2024, with men in their 40s and 50s among the highest-claiming groups ⁸. None of this means a working-age applicant is penalised — it simply explains why income protection underwriting looks closely at recency and time off work.

Can a mental-health exclusion be reviewed or removed later?

Often, yes — and this is one of the most useful things to know, because an exclusion offered today does not have to be permanent.

Many insurers will reconsider a mental-health exclusion after a period of stability, commonly a couple of years, where you have had no further episodes, no time off work for mental health, and no ongoing treatment beyond what is settled and routine. You apply to have the exclusion reviewed, the insurer typically requests an updated GP report, and if the picture has improved they may remove the exclusion, convert it to a loading, or leave it in place for now. There is no guarantee, and the decision rests on the specific policy and your circumstances at the time — but the door is rarely closed for good.

This is part of why taking an exclusion now can still be a sensible step rather than a dead end. It gets the bulk of your cover in force, and it leaves room to improve the terms later as your history lengthens with stability behind it. An adviser can diarise the review and put it forward at the right time, which is easy to forget if you are managing the policy yourself.

How income protection treats mental-health claims

Income protection is where mental health shows up most, both in applications and in claims, so it deserves its own look.

The first thing to know is that a mental-health history does not automatically mean you cannot get income protection. AIA New Zealand, for example, states that its income protection products do not contain blanket mental-health exclusions — each application is assessed on individual circumstances ⁷. That is the general picture across the market: insurers underwrite the individual, not the category.

The second thing is that some policies offer a mental-health limitation as a deliberate option. With AIA's income protection, a customer can choose to cap mental-health claim payments at two years in exchange for a lower premium ⁷. This is a genuine trade-off rather than a penalty: you accept a limit on how long a mental-health claim would pay, and you pay less for the cover. Whether that suits you depends on your budget, your history, and how you weigh the risk — it is exactly the kind of decision worth talking through rather than ticking by default.

The scale of these claims is the reason the cover matters. AIA New Zealand paid $25.7 million towards mental-health-related claims in 2024 (out of $829.6 million in total claims paid that year) ⁴. Mental health is now one of the main reasons New Zealanders draw on income protection at all. If your concern is being off work due to illness rather than injury — where ACC generally will not help — it is worth understanding the gap, which we set out in off work through illness, not injury.

How an adviser positions a mental-health disclosure for the best result

The same history can produce different terms at different insurers, and the way it is presented to the underwriter genuinely affects the outcome. This is where an adviser earns their keep.

In practice it means a few things. Knowing which insurers tend to view a given condition more favourably, so the application goes where it is most likely to land well. Helping you assemble accurate, complete information up front — dates, treatment, recovery, current status — so the underwriter sees a clear, contextualised picture rather than a bare tick-box. Putting questions to underwriters informally before a formal application, where appropriate, to gauge likely terms without leaving a trail of declines on your record. And, if terms come back with a loading or exclusion, knowing whether to accept, negotiate, try another insurer, or plan to review it down the track.

We work across a panel of selected New Zealand insurers — Partners Life, AIA, Fidelity Life, Asteron Life, Chubb Life and Cigna among them — which lets us compare like-for-like and steer a disclosure to where it is treated most fairly. Not every insurer in the market is shown by any one adviser, and each insurer's policy wording and product disclosure statement is the final word on terms and exclusions. We are generally paid by commission from the insurer when you take out a policy through us; this does not change the premium you pay, and any conflicts are managed in line with our duty to prioritise your interests — full details are in our disclosure.

The goal is simple: get you the broadest cover on the fairest terms your history allows, and keep the option open to improve them over time.

Frequently asked questions

Do I have to tell the insurer about counselling or antidepressants?

Yes. Counselling, therapy, antidepressants and relevant GP visits are all material to an insurer and must be disclosed, even if a condition was mild or years ago. Disclosing fully protects your claim later; leaving something off can give the insurer grounds to decline a claim or void the policy.

Will anxiety or depression mean I can't get life insurance in NZ?

Usually not. A mental-health history more often affects the terms — a loading, an exclusion, or a deferral — than results in an outright decline. Declines tend to involve severe or active conditions. Many people with a history of anxiety or depression get cover, sometimes on standard terms if the condition is historic and resolved.

Is a mental-health exclusion on my policy permanent?

Not necessarily. Many insurers will review an exclusion after a period of stability — commonly a couple of years with no further episodes or treatment — and may remove it or convert it to a loading. There is no guarantee, and it depends on the policy and an updated GP report, but exclusions can often be revisited.

Can I get income protection with a history of depression?

Often, yes. Many NZ insurers, including AIA, do not apply blanket mental-health exclusions and assess each case individually ⁷. You may be offered standard terms, a loading, or an optional mental-health limitation (for example, capping mental-health claims at two years in exchange for a lower premium ⁷). It depends on severity, recency and treatment.

Does seeing a counsellor make my insurance more expensive?

Not by itself. Underwriters generally view engagement with treatment positively — it signals a condition that is understood and managed. What affects terms is the underlying severity and recency, not the fact that you sought help. Being in or having completed treatment often supports a better outcome than declining help and remaining unwell.

Should I disclose a mental-health condition through an adviser or directly?

Either is fine legally, but an adviser can help you present the history accurately and to the insurer most likely to view it favourably, and can sound out likely terms before a formal application. That can mean better terms and fewer declines on your record. A confidential review is a good place to start.

This article is general information only and is not personalised financial advice. It does not take into account your particular financial situation, goals or needs. Before acting, consider whether it's right for you and seek advice tailored to your circumstances. Whether a claim is paid depends on the terms, conditions, exclusions, stand-down periods and underwriting of the specific policy, and on your disclosure — always read the policy wording. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 6 February 2026.