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<\/a>According to the Consumer Action Law Centre, one of the eleven groups involved in the campaign, the funeral insurance industry is misleading consumers and needs to be reformed.<\/p>\n
The advocacy groups have released a 13-point strategy to address a number of concerns. The groups believe the funeral insurance industry suffers from\u00a0a lack of competition, poor disclosure from product providers and misleading advertising.<\/p>\n
Some of the key recommendations include:<\/p>\n
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- Fixing premiums for the duration of a policy<\/li>\n
- The introduction of capped insurance products<\/li>\n
- Improved reporting on policy attrition<\/li>\n
- Providing prospective customers with an estimated total cost of the policy<\/li>\n
- Extending the policy lapse period (currently most policies can be cancelled if premiums are in arrears for 28 days)<\/li>\n
- Greater promotion by superannuation and life insurance providers about availability of funeral benefits within these products and\/or advanced claims payments to cover funeral expenses<\/li>\n<\/ul>\n
The campaign was sparked by research released by the Australian Securities and Investments Commission (ASIC) in 2012, which found that consumers are unlikely to shop around for funeral insurance (see: Consumer Uncertainty Over Funeral Insurance<\/a>).<\/p>\n
Consumer Action Law Centre CEO, Gerard Brody<\/strong>, said the advocates wanted to present the industry with a list of practical measures which would have tangible benefits for present and future policy holders.<\/p>\n
It\u2019s not uncommon for our lawyers to hear from clients who don\u2019t understand the nature of their funeral insurance product<\/p><\/blockquote>\n
\u201cIt\u2019s not uncommon for our lawyers to hear from clients who don\u2019t understand the nature of their funeral insurance product. Often they don\u2019t realise the insurance premiums can increase as they get older, meaning the product becomes more and more unaffordable over time,\u201d Mr Brody said.<\/p>\n
\u201cWe only hear from policy holders after the damage is done\u2014after they\u2019ve paid years\u2019 worth of premiums for a product that simply isn\u2019t right for them. Implementing the thirteen ideas in our strategy would prevent many of the problems we see\u2014and as we all know, prevention is better than a cure.\u201d<\/p>\n
Among the groups behind the strategy are Choice, National Seniors Australia, the Insurance Law Service and the Financial and Consumer Rights Council.<\/p>\n
\u201cConsumer and older Australian advocates have set the challenge and it\u2019s now up to the funeral insurance industry to respond. Insurers need to decide if they want to continue to benefit from a flawed market place, or if they want to let the sun shine in and allow Australians to benefit from greater disclosure, safer products and better consumer protections,\u201d said Mr Brody.<\/p>\n