Confronting the Underinsurance Dilemma


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

  • Allow the cost of all life insurance premiums to be made tax deductible (26%)
  • Allow the cost of financial advice to be made tax deductible (19%)
  • I have another solution (17%)
  • Develop and implement financial literacy programs in which every primary and/or secondary school student would have the opportunity to participate (15%)
  • Compulsory life insurance for anyone taking out a mortgage (14%)
  • Initiate public awareness campaigns to better educate adult consumers about the critical importance and value of life insurance (9%)

If our poll question looks familiar this week, that’s because we asked you the same question last year.

In August 2020 when we last canvassed your views, the majority of advisers said the most critical area in finding a solution to the underinsurance dilemma rested in the financial space, rather than solutions related to changing the attitude of the community or improving financial literacy.

Back then, you said a tax break for either the cost of financial advice or the cost of life insurance premiums was your preferred solution (see: Use Tax Breaks to Address Underinsurance…). But does this still apply?

While less than nine months has elapsed since we shared this conversation, we reflect that the world is now a different place – both at a macro level due to the ongoing impact of the Covid-19 pandemic and also on a more micro level in terms of the progression of regulatory reform in Australia’s life insurance sector and the ramifications this will have over the longer term.

For many advisers, especially risk advice specialists, the more pressing dilemma at the moment revolves around the ability simply to sustain a viable advice business. This issue remains a focus for Riskinfo and we will continue to monitor and report developments around this critical area.

In the meantime, though, as we celebrate Life Insurance Awareness Day on 21st April 2021, we welcome your updated thoughts and ideas on what remains an unresolved dilemma…


  1. Separation of Insurance and Investment advice, an overhaul of the LIF and FASEA to encourage existing advisers to remain in the Industry and provide an incentive to recruit risk advisers is the solution.
    What we currently have is the exact opposite situation, which reflects the growing Under-insurance epidemic.

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