ClearView has welcomed new measures announced in last night’s Federal Budget that would make life insurance opt-in only for superannuation members under 25 years old, with managing director, Simon Swanson, calling for the policy to be extended to all members across the board.
Swanson said the new policy meant that young workers would no longer be “forced” to hold “costly life insurance that they often did not need and could not afford or claim on”.
He said that making group insurance an opt-in product for all workers would “result in a substantial improvement in understanding what cover they have and don’t have and stop the excessive erosion of their savings by fees and premiums”.
ClearView said that an opt-in system would result in Australians investing in insurance that actually covered their needs, saying that currently “too many … only have a fraction of the cover they need”.
“While some, such as young people, end up with cover they don’t need, there are many other workers with significant needs who falsely believe they’re adequately covered when they are not,” Swanson said.
“If the goal of group insurance is to protect and maximise value for members, this is a highly inefficient system. It hinders optimal behaviour by discouraging members to properly assess their needs and regularly reviewing their arrangements.”
The company said that this, and other Budget super changes, “represent sensible public policy and highlight the need for an overhaul of current group life arrangements”.