Life insurance customers are being denied access to effective rehabilitation due to laws preventing life insurers from funding medical treatment, according to MLC Life Insurance.

The insurer is calling for changes to laws that block insurers from funding treatment as part of its submission to the Parliamentary inquiry into options for greater insurer involvement in rehabilitation. It says it frequently encounters customers who are unable to access the necessary treatment, which can delay their rehabilitation to the point that the chance of returning to health and resuming work is at risk.

“Every day counts”, said Natalie Cameron, Chief Claims Officer, MLC Life Insurance. “The longer the wait for rehabilitative medical treatment the more likely it is a person will be permanently off work. At the moment, we have customers whose best chance of returning to full health is via timely access to medical treatment, but who for legislative reasons are unable to access it.

“If laws were changed to permit a life insurer the option to fund a portion of medical treatment as part of a program of rehabilitation all our customers would benefit. Claiming customers would realise greater value from their insurance and have an improved chance to return to health and employment. Other customers should also benefit via lower claims costs and less pressure on premiums,” Cameron said.

If life insurers were permitted the option to do this, and this resulted in higher rates of customers returning to employment, there would be a shared public benefit across the community, not just economic. In general, work-related disability, unemployment and being away from work for a long time can lead to isolation from friends and family, a loss of confidence and identity. By helping people back to work, life insurers can help a claimant regain their self-esteem and purpose, and make it more likely to be connected to their community.

Natalie Cameron continued: “MLCL Life insurance wants to do more than act as a financial backstop when the worst happens. We want to help our customers reach their goals to return to health and work, and that means doing more to support their mental and physical wellbeing. Funding medical treatment as part of a program of rehabilitation will allow us to do that.

The Australian Government has asked the Parliamentary Joint Committee on Corporations and Financial Services inquiry to look into options for greater involvement by private sector life insurers in worker rehabilitation. MLC Life Insurance welcomed the inquiry and its submission to the inquiry can be found here.