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Elsewhere in this issue, a roundtable of group insurance industry stakeholders came up with a number of ways to enhance Australians’ insurance coverage through group risk products. Reducing hassle and turn-around times for both making an application and receiving payment on a claim were two key suggestions, with delays at the doctors’ end of things pinpointed as an oft-overlooked area for improvement. The creation of more tailored and relevant products was also touted, as was a major education campaign to go with them. The Investment & Financial Services Association (IFSA) is already well advanced on this, writes the Association’s EMMA GRAINGE.
Superannuation funds and their group risk insurance partners have made great progress in helping tackle Australia’s underinsurance problem. But there’s only so far the one size fits all default approach can go in addressing the issue. On May 1 IFSA will launch a multi-year education-based consumer campaign aimed at helping Australians understand the risks they face in life and how to protect themselves against those risks. The campaign – called Lifewise – recognises that the only way to address Australia’s chronic underinsurance problem is by boosting consumer engagement.
Research conducted by IFSA in 2005 raised the profile of underinsurance, a problem the life insurance industry has been aware of for a while. Despite the fact that almost every working Australian has a level of life insurance cover within their superannuation, Australia has proved to be one of the most underinsured nations in the developed world. In fact, a 2007 Swiss Re research report found Australia ranks 16th in the world for life insurance density and penetration. And a 2008 survey by the Australian Institute of Superannuation Trustees (AIST) and Industry Funds Forum (IFF) revealed that “one in two industry fund members were underinsured by $100,000 or more”.
Specifically results of the survey showed that: • 50 per cent are underinsured by $100,000 for life insurance. • 74 per cent are underinsured by $100,000 for TPD. • 45 per cent are underinsured by $1000 a month for income protection. We’ve com e a lo ng wa y But it’s not all bad news. The super industry in conjunction with group risk providers has made significant progress tackling this issue. Over the past three years most super funds have increased their default level of cover and a number of funds have gone to great lengths to help their members appreciate the importance of life insurance.
