Use Tax Breaks to Address Underinsurance – Poll


What is the single most critical initiative you would implement to address Australia’s underinsurance dilemma?

  • Allow the cost of financial advice to be made tax deductible (28%)
  • Allow the cost of all life insurance premiums to be made tax deductible (24%)
  • I have another solution (22%)
  • Initiate public awareness campaigns to better educate adult consumers about the critical importance and value of life insurance (12%)
  • Compulsory life insurance for anyone taking out a mortgage (9%)
  • Develop and implement financial literacy programs in which every primary and/or secondary school student would have the opportunity to participate (5%)

The future tax deductibility of financial advice and of all life insurance premiums are two initiatives that have been well-supported by advisers in addressing potential solutions to Australia’s underinsurance crisis.

31 percent of those voting in our latest poll support tax deductibility of financial advice as the most critical initiative they would implement to address the underinsurance issue if they were in charge, while 15 percent said tax deductibility for all life insurance premiums was their preferred top choice.

While the options available in this poll reflect the most popular solutions offered at Riskinfo Round Tables over the last ten years, there are clearly more solutions out there – as evidenced by the 27 percent of our readers who believe there are better answers which, if implemented, would best address underinsurance. Based on your feedback to this poll, some of those other answers include:

  • Abolish the Life Insurance Framework remuneration reforms
  • Retain hybrid commissions at 80/20 at least until life companies ramp up process efficiencies
  • Overhaul FASEA standards
  • Allow risk specialists with industry-specific qualifications to attach to every financial planning business

It comes down to cost…

For many others, though, their view is encapsulated by one adviser comment which stated: “It comes down to cost.”

Public awareness campaigns were favoured by 12 percent of our voting group, while nine percent opted for compulsory life cover when taking out a mortgage and six percent said the answer lies in school financial literacy programs.

When this topic is discussed at our Round Tables, the most-offered opinion is all around education. That is, the long-term answer to eliminating underinsurance in Australia (and in other countries) is to implement better financial literacy narratives for school age children.

…affordability is the key issue

For this poll, however, which has seen almost half the votes directed towards financial incentives (tax breaks), it seems that advisers are telling us that affordability is the key issue when it comes to underinsurance, rather than a lack of understanding of finances or of the need for insurance in the first place.

Our thanks as always to those who have taken the time to contribute to this discussion as the debate surrounding the answer to underinsurance in Australia continues…


  1. Funny that increasing commission rates was not an option given and you couldn’t even write it in. Perhaps use a smaller sample first before doing a poll for everybody as I have seen obvious choices missing a few times.

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