The problem of underinsurance presents a major growth opportunity for the Australian life insurance industry, the AFA has said.
Speaking exclusively to Risk Adviser, risk specialist and AFA state director Dave Slovinec said that while a lot of consumers have some default cover in their superannuation, they also need to understand what they have and how they are protected.
“The underinsurance issue in Australia is a massive problem,” Mr Slovinec said.
“There’s a massive opportunity out there to get the word out about the importance of Australians getting insured.
“I think it’s making sure people understand what it is and what they’ve currently got.”
Mr Slovinec noted that the underinsurance problem is not about a lack of consumer desire for products, but about advisers educating consumers on insurance and showing them the benefits of having protection in place.
He mentioned the AFA’s efforts around its Your Best Interests program in educating consumers about the importance of getting advice.
“It’s not the first thing that people think of. It’s not at the forefront of their thoughts, especially when you’re young and starting out,” he said.
“That’s part of the Your Best Interests piece that the AFA has put around the consumer education around why it’s important to get advice and why you should speak to a financial adviser at any stage in life – from the beginning of your journey in employment right through to any life stage, from getting married and having children, [to] then one day being able to retire and live comfortably.”