Mental illness and LTD benefits: a Sun Life Report
Sun Life recently released some internal statistics regarding mental health and long term disability claims. The report confirms what many in the industry have suspected for some time: LTD claims for depression, anxiety, and other mental illnesses are on the rise. In fact, 30% of all long term disability claims are mental health related, which is more than the next two most common causes of disability combined, with cancer at 15% and accidents at 12%.
About the report.
Sun Life insures more than six million Canadians. It has vast amounts of health, employment, and other data related to all types of disability claims. This report, Designed for Health – A Focus on Mental, provides a very general overview of mental health claims, with some interesting statistics.
Long-term disability claims are increasing.
Claims are up across the board, not just for depression and anxiety. According to Sun Life, LTD claims have increased 16% overall since 2016. It is reasonable to assume that denials are also up 16% (or more), since insurance companies cannot pay more in claims than it takes in for premiums over the long term and still make a profit.
Mental illness accounts for most LTD claims.
As noted above, mental health claims accounted for 30% of all claims, compared to 15% for cancer, 12% for accidents, 11% for musculoskeletal disorders, 9% for arthritis, 5% for neurological disorders, and 5% for circulatory disorders.
In addition, mental health claims are growing at a much faster rate that other claims. Claims for depression, anxiety, and other mental illness are up 27% since 2014, whereas most other causes of disability are in decline or have plateaued. The report speculates that slower growth and decreases for some medical conditions may be due to more effective treatment. More claims are anticipated in the future, due to an aging population and rising rates of obesity.
Depression most common mental health disability.
Of the 30% of all LTD claims that are mental health related, more than half, 53%, are for depression. The balance consists of 17% for adjustment disorders and stress, 16% for anxiety and panic disorders, 3% for bipolar disorder, 3% for post-traumatic stress disorder, and 8% for other mental illnesses.
Mental health claims by demographic.
The report notes women are twice as likely to have an LTD mental health claim than men, but the number of mental health claims by men is rising faster than for women. People aged 35 to 54 are approximately 50% more likely to have an LTD mental health claim than those under age 35, but the rate of growth is highest for people under age 35.
Why are mental illness claims increasing?
Sun Life acknowledges that there is no clear answer to this question, but suggest several possible root causes.
One is increasing social isolation, which is a known risk factor for poor mental health. Another suspected cause is changing economic structures, noting the increase in contract and temporary employment is more precarious (although most people working part-time or in the “gig economy” do not have access to long term disability benefits and therefore would not form part of Sun Life’s data). Increased use of social media is another suspected cause, and so is changing attitudes towards mental health. As stigma deceases, more people may be willing to discuss their mental health and make an insurance claim.
The report also comments on a possible link to the economy:
Recent research suggests there is an association between the health of the economy and LTD claims. However, it may not be the association most would think of. As the economy improves, LTD claims tend to rise, then fall during economic declines.
This may seem counterintuitive, but the hypothesis is that during more difficult economic times, people experience increased stress (due to precarious employment and financial stress, for example). This increased stress leads to anxiety and depression – but the employee is able to keep functioning in the short term. As the economy improves, many employees are left depleted or “burned out.” A healthier economy may also give people a sense of “safety” in terms of not losing their job. This may cause them to be more likely to go through their workplace group benefits to help improve their mental health, including applying for a disability claim.
Conclusion.
Sun Life’s report is an interesting read, but it certainly does not tell the full story. For example, Sun Life does not reveal what percentage of long term disability claims for mental health are denied, nor does it disclose how often denied claims are successful on appeal. Long term disability lawyers would be very interested to know these statistics, but unfortunately no insurance company will ever release that type of claims data.
If you have questions about long term disability benefits, contact Jan A. Fishman at: jan@fishmanlawyers.ca.
