Super Consumers Australia (SCA) has called for an end to occupational exclusions from default life insurance in superannuation so that all Australians are defaulted into the insurance safety net.
The call came as the Government reviewed the appropriateness of occupational exclusions in default insurance in MySuper products.
Xavier O’Halloran, SCA director, said: “Stopping the scourge of costly duplicate accounts will ultimately lead to bigger retirement savings for people, but without action from Parliament there is a risk some people will lose access to affordable default insurance cover in their super.
“At the moment some funds are excluding people from safety net default cover if they work in certain occupations like as a bartender or labourer, putting them and their families at risk.
“The greatest benefit of default insurance is its ability to share risk among a large group of people, so that everyone has access to affordable cover.”
O’Halloran said a small number of funds had undermined the value of their cover by omitting for certain occupations.
“This creates gaps and weakens the safety net. It’s not in keeping with the needs of people in a modern workforce, who change jobs and industries throughout their careers, but still expect to have a base level of protection,” he said.
Super Consumers research found excluding certain occupations did not necessarily make cover cheaper with one large fund with insurance exclusions charging more than double compared to the average premiums charged by other large funds without exclusions.