Insurance provisions within superannuation have changed with the crisis as issues around early access, PYS and new ASIC guidelines on TPD have arisen. This session discussed the latest developments and what needs to be considered in this new environment.

SPEAKERS:
Nick Kirwan, senior policy manager, life insurance, Financial Services Council
Xavier O’Halloran, director, Super Consumers Australia
Moderator: Alex Proimos, head of institutional content, Conexus Financial

Key Takeaways

  • There is a real inconsistency in data in life insurance that is being collected, so insurers are not getting a clear picture of the claims handling process and clients are often not getting a good understanding of whether they’re covered in the first place.
  • Super Consumers Australia have conducted clandestine shadow shopping of group insurance within super and asked questions that are pertinent to the pandemic such as: ‘I’m unemployed at the moment and for a period of time and looking to make a claim, how will that affect my ability to make a claim?’
  • Super Consumers found that the fund responses have been unsatisfactory, to the point where some just hand over a PDS and say ‘the answers are in there’.
  • While there is an acknowledged need for standardised terms and conditions in policies, Nick Kirwin warns that standardisations of policies is easier said than done.
  • Kirwin compares it to the UK, where he was involved in some of this kind of standardisation previously: “We shouldn’t underestimate the size of the task in Australia. The market is much more diverse, there are many more stakeholders,” he said.

Poll Results

If you could only vote for one of the below within group insurance, what would it be?

  • Universal terms - a standard default for all members
  • Allowing trustees the option to offer IP or TPD benefits rather than being restricted to having to offer TPD as the MySuper default
  • No default insurance in super
  • Extending the types of disability benefits that can be offered in super, eg trauma events
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