The call by Financial Services Minister, Stephen Jones, for the life insurance sector to lift its game when it comes to delivering the desired benefits of life insurance inside superannuation, drew the attention of a good many Riskinfo readers this week…
The life insurance sector must lift its game when it comes to delivering the desired benefits of life insurance inside superannuation.
That was one of the key points made by the Assistant Treasurer and Minister for Financial Services, Stephen Jones, when speaking at an industry event on Tuesday. Among his concerns are delays in life insurance payouts.
“I’m calling on the whole financial industry to unite behind a clarified purpose of the superannuation system,” he said.
“And I’m calling on funds and insurers to lift expectations. To lift standards. And to lift outcomes for members. They have to come first, second and third. Nothing else matters nearly as much.”
He said for insurance in superannuation to achieve its desired benefits, the insurance sector needs to lift its game, stating that:
- Members have to come first
- Products have to be tailored to their needs
- They need to be affordable “because the premiums are paid from retirement savings”
- And insurers need to pay out in a timely fashion for appropriate claims
“Based on information from the Australian Financial Complaints Authority, insurance companies can do better,” he said.
Jones said a third of all superannuation complaints relate to TPD and income protection, and that three of the top five types of superannuation complaints relate to insurance.
“AFCA is receiving two complaints a day just for delays in claims handling,” he said. “For insurance to be a benefit of superannuation, the customer experience must improve.
“Members have to be at the centre of the system.”
Around 5.5 million Australians rely on the default life insurance coverage provided by their superannuation trustee.