Is insurance within super failing breast cancer sufferers?
Young women with breast cancer stand to be significantly disadvantaged by suggestions that people under the age of 25 be allowed to opt out of life/risk insurance within superannuation, according to the Breast Cancer Network Australia (BCNA).
In a submission to the Joint Parliamentary Committee of inquiry into the life insurance industry, the BCNA pointed to the difficulties already being experienced by such women, including superannuation funds denying them access to insurance cover.
“It is of great concern to BCNA that, despite the existence of group insurance attached to superannuation, a significant number of our members report difficulty accessing their policies when they need to,” the submission said.
It said a 2014 BCNA survey of 582 people living with metastatic breast cancer found that 29 per cent (170) had not been able to access their lump sum super through the terminal illness provisions although they had wanted to do so.
The submission said the most common reasons given were the terminology around the number of months they were expected to live and the complexity of paperwork in submitting a claim.
“Other people discussed encountering difficulties when dealing with their super fund, including poor communication, being sent incorrect forms or not receiving clear information about entitlements,” it said. “Others were unsure how their claims were assessed and what entitlements were associated with their superannuation policies, including total and permanent disability (TPD) benefits and total and temporary disability (TTD) benefits, also referred to as income protection or salary continuance.”
The BCNA submission said the organisation was delighted that in 2015 the Australian Government agreed to amend the superannuation laws to extend the life expectancy requirement of the terminal illness provision from 12 months to 24 months stating this would benefit many people living with a terminal illness.
“We remain concerned, however, about unintended consequences that have arisen from this change, particularly around access to life insurance death benefits attached to superannuation policies, which are commonly paid out only when life expectancy is 12 months or less,” the submission said. “While some superannuation funds are re-negotiating arrangements with their insurance providers to allow death benefits to be paid to terminally ill members with a life expectancy of 24 months, this practice has not yet been adopted as an industry standard meaning people may not be aware whether their own fund has made this change.”
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
