Given the rising prevalence of conditions such as depression and anxiety, South Africans are urged to take charge of their mental health, break the stigma, and seek treatment. And life insurance companies have a responsibility to support clients in doing just this.

Breaking the stigma

One in eight people live with a mental health condition, yet the true extent of mental health issues in society remains disguised due to the complexity surrounding these conditions and their link to other physical conditions.

Our mental health can be impacted by several factors, including stress, immunology, and genetics. Social issues such as crime, rising inequality, and the global geopolitical climate add to the psychological and emotional strain we experience. Excessive social media usage, isolation and loneliness are also contributing factors that may exacerbate mental health conditions.

of disability claims paid out were for mental health conditions
R161 billion per year
is the estimated cost to the South African economy due to unaddressed mental health conditions

The true cost

It is little wonder then that an analysis of the statistics from large South African insurers shows that claims for mental health conditions account for 18% of disability claims paid out and is the third highest cause of disability claims just behind musculoskeletal and cancer claims.  Moreover, we expect to see psychology-related disability claims to continually increase over the next decade.

This is a major concern, as mental health conditions carry enormous economic consequences, contributing to lost productivity in the workplace and putting further strain on an already overburdened healthcare system. Health economists have estimated that unaddressed mental health conditions cost the South African economy approximately R161 billion per year, while globally depression and anxiety alone cost the global economy nearly US$ 1 trillion according to the WHO.

This doesn’t account for the indirect costs associated with mental health conditions. For example, major depression can also suppress appetite or result in overeating, which can then lead to conditions like diabetes and obesity. As such, while mental health issues are often the root cause of weight gain or ill-health, our healthcare systems treat the physical condition while often neglecting the underlying mental health issue.

The role of life insurers

To address the precarious state of mental health and its consequences for society, both public and private sectors need to enhance their efforts around mental health. Key elements in achieving the Sustainable Development Goals (SDGs) related to mental health include transforming attitudes, actions, and approaches to foster and safeguard mental health, as well as expanding access to treatment and care for individuals in need.

While the costs associated with the deteriorating state of mental health are significant, companies stand to gain more value by giving employees the help they need, especially since effective treatment for many psychological conditions can be achieved within a relatively low cost.

From a life insurance perspective, providing access to affordable and effective insurance cover for treatment is the starting point. Financial protection against the cost of lifestyle adjustment, as seen with any other disability, is important to recognise and provide appropriate cover for. Examples of such lifestyle adjustments could include costs for personnel support to take care of your family or paying off major debts (a mental health obstacle in itself).

In the event of a permanent disability, having a lump sum cover payout helps with these lifestyle adjustments while an income cover payout helps to continue paying for regular living expenses and offers you an opportunity to keep living a fulfilling life.

To be fully supportive, life insurers can further encourage disclosures around mental health by taking into consideration aspects such as the social support structures individuals have in place to negate the premium loadings during the underwriting process. This is the biopsychosocial approach to mental health needed in the life insurance industry.

Providing disability cover as a standalone product without life cover is another important consideration that can broaden accessibility and financial protection against the effect of mental health conditions.

Raising awareness and encouraging early detection are critical steps towards risk management and establishing a healthier society. Life insurers may play a vital role in ensuring individuals receive the care they require and avoiding potential risks by advocating for greater mental health support. Promoting early detection, advocating for improved mental health care, and adapting a holistic approach will not only result in better risk management, but will also contribute to a healthier and more productive society.

  • Disclaimer


    Investec Life Limited, a member of the Investec Group, is a licensed Life Insurance Company and an authorised Financial Services Provider (FSP number 47702). The video on this page contains factual information and should therefore not be regarded as financial advice. Terms and conditions apply.

    Focus and its related content is for informational purposes only. The opinions featured on the site are not to be considered as the opinions of Investec and do not constitute financial or other advice. The information presented is subject to completion, revision, verification and amendment.

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