If you told your insurer about anxiety, depression or burnout when you applied for cover, there's a good chance your policy came back with a mental health exclusion. Most people sign it, file it and forget about it.
A recent RNZ interview showed why that wording deserves a second look. Insurance lawyer Tim Gunn says some people with Long Covid are having income protection claims declined under mental health exclusions, even though insurers don't treat Long Covid as a mental health condition.
What is a mental health exclusion on insurance?
It's a clause that stops your policy paying claims for certain mental health conditions, usually added because you disclosed a past or current issue when you applied. It most often shows up on income protection, but it can appear on trauma, TPD and other cover too.
The key thing is the exact wording. Some exclusions are narrow and only cover the condition you disclosed. Others are broad and cover a long list of conditions and symptoms.
Why are Long Covid claims being declined?
According to Gunn, some broad mental health exclusions include wording around disorders related to fatigue. Because fatigue is a major symptom of Long Covid, those exclusions have been used to decline claims for people who can't work.
His argument is that an exclusion should be limited to the condition you disclosed, or things directly related to it, not a blanket clause that catches non-mental health illnesses. He says some of his clients have been stuck in review processes for years.
Partners Life told RNZ it doesn't regard Long Covid as a mental health disorder and has accepted Long Covid claims, including from customers with mental health exclusions. It said each claim is assessed against the policy wording. That's the point: two policies with similar sounding exclusions can behave very differently at claim time.
How do I check what my exclusion actually covers?
Find your policy schedule or acceptance letter and read the exclusion word for word. Don't rely on the heading.
Questions to ask yourself:
- Does it name a specific condition, or does it say "any mental health disorder" or similar?
- Does it list symptoms such as fatigue, stress or sleep problems?
- Does it apply to every benefit on the policy, or only income protection?
- Does it say anything about conditions "related to" or "arising from" the excluded ones?
If the wording is broad, it doesn't automatically mean you're unprotected. But it's worth understanding now, while you're well, rather than finding out from a decline letter.
Not sure what your exclusion means? Book a free 15-minute consultation and we'll go through it with you.
Can I get a mental health exclusion removed?
Sometimes. You can ask your insurer to review an exclusion, and some will consider narrowing or removing it if your circumstances have changed, often after a period without symptoms or treatment. There's no guarantee, and it's entirely up to the insurer.
An adviser can help put that request together with the right medical information. Whatever you do, don't cancel your existing policy hoping for cleaner terms elsewhere. A new insurer will underwrite you from scratch and may add the same exclusion, or worse.
What if my claim has already been declined?
Ask the insurer for the decision in writing with the specific wording it relied on, then use its internal complaints process. If you're still not happy, you can take it to the insurer's free dispute resolution scheme, such as the Insurance and Financial Services Ombudsman.
Disputes are rising. Insurance Business reported that the Ombudsman scheme completed a record 833 dispute investigations in the year to 30 June 2026, with scope of cover and exclusions among the most common issues raised.
Common questions about mental health exclusions
Do I have to disclose mental health history when applying for insurance?
Yes. You need to answer the insurer's questions honestly and completely. Leaving something out can mean a claim is declined or the policy is cancelled, which is far worse than an exclusion.
Does a mental health exclusion mean I can't claim for anything?
No. It only stops claims that fall within the exclusion wording. Claims for unrelated illnesses and injuries should still be assessed normally.
Is Long Covid a mental health condition?
Partners Life told RNZ it treats Long Covid as a post-infectious condition, not a mental health disorder. How a claim is handled still depends on your policy wording.
Can I still get income protection if I've had depression or anxiety?
Often, yes. Many people are offered cover with an exclusion, a loading or both. The terms vary between insurers, which is where comparing options helps.
How we can help
Invicta's personal insurance advice is fee-free. We'll read your exclusion with you, explain what it does and doesn't cover, and help you ask your insurer for a review if that makes sense. If you're applying for new cover, we'll compare terms across our panel of AIA, nib, Chubb Life, Partners Life, Fidelity Life and Asteron Life, and help you disclose properly so your cover holds up at claim time. Learn more about our personal insurance advice, or read why ACC won't pay if you get sick.
Know what your policy says before you need it
An exclusion you signed years ago can decide whether you're paid when you can't work. Ten minutes reading it now could save a lot of stress later.
Want to know whether your income protection would actually pay out?
Let’s Make it Happen
15 minutes is all it takes. We’ll give you clear, fees-free advice so you can get your ducks in a row
Sources
- RNZ, Long Covid sufferers being denied insurance over 'mental health' exclusions, lawyer (28 October 2026)
- Insurance Business NZ, nib records worst customer satisfaction of any NZ provider as health insurance complaints spike (27 October 2026)
- Insurance and Financial Services Ombudsman Scheme
General Information Disclaimer
The information in this article is general in nature and is not intended to be personalised financial advice. It does not take into account your individual goals, financial situation, needs, or circumstances.
Any examples, figures, rates, or scenarios are for illustrative purposes only and may change over time.
Before making any financial decision, you should consider whether the information is appropriate for your circumstances and, where appropriate, seek personalised advice from a licensed financial adviser.
Never cancel existing cover until new cover is in force.
Related Blogs
Let’s Make it Happen
15 minutes is all it takes. We’ll give you clear, fees-free advice so you can get your ducks in a row