Action needed on life cover
The financial services industry has been urged to address the issue of chronic underinsurance in Australia in circumstances where the level of group life insurance provided by most superannuation funds would not be adequate to pay out a mortgage.
The chief executive of Tower Group, Jim Minto, said the life industry was facing a major challenge with respect to underinsurance in circumstances where there had been a 10-year deterioration in the level of insurance in Australia.
Minto said that Australian consumers needed to be educated to better understand the implications of being underinsured, particularly in circumstances where there had been a huge increase in mortgage debt per household, higher credit card debt and large annual increases in medical costs.
“To sum this up, there is far more financial risk per family that is usually not recognised in the community or families,”he said. “This adds up to more uninsured risk and a potentially greater burden on our society as we deal with the consequences in future years.”
Minto said that the life industry was, in part, responsible for the problem because it had outsourced distribution.
AUTHOR
Mike Taylor
Recommended for you
In this episode of Relative Return Unplugged, hosts Maja Garaca Djurdjevic and Keith Ford are joined by special guest Shane Oliver, chief economist at AMP, to break down what’s happening with the Trump trade and the broader global economy, and what it means for Australia.
In this episode, hosts Maja Garaca Djurdjevic and Keith Ford take a look at what’s making news in the investment world, from President-elect Donald Trump’s cabinet nominations to Cbus fronting up to a Senate inquiry.
In this new episode of The Manager Mix, host Laura Dew speaks with Claire Smith, head of private assets sales at Schroders, to discuss semi-liquid global private equity.
In this episode of Relative Return, host Laura Dew speaks with Eric Braz, MFS portfolio manager on the global small and mid-cap fund, the MFS Global New Discovery Strategy, to discuss the power of small and mid-cap investing in today’s global markets.
