A former chairman of the Association of Superannuation Funds of Australia has flagged the importance of industry getting the correct balance between affordability and restrictive terms when it comes to life insurance within super.
Dai-ichi Life Asia-Pacific’s director Jim Minto says it is important industry communicates effectively with members so that they understand the necessary trade-off.
“These steps towards sustainability have created media interest and some have said it is harder to claim following the changes,” he told the ASFA Conference on Wednesday.
“The superannuation sector has now become the largest volume provider of life insurance benefits to people across Australia and, yes, it must be sustainable and deliver value as intended.”
Mr Minto said 70 per cent of all life benefits are now structured through super because the model has worked well, and is efficient and effective.
“People have actively moved towards the model. So too must we now make sure it is fully trusted and can be relied on,” he said.
Risk Adviser reported last week on the establishment of the Superannuation Industry Working Group, comprising of Australia’s superannuation industry bodies, with the goal of developing leadership on insurance in super.
Mr Minto is the adviser to ASFA on life insurance in the group, according to his LinkedIn profile.
He said the Superannuation Industry Working Group – which held its first meeting on Monday – will develop a tailored code of practice for its life insurance benefits.
“This is all about bringing better design and practice as well as more consistency and clarity for members as well as enhancing consumer protections,” Mr Minto said.
He said the super industry will also “systematically address various concerns and issues that have arisen in the past few years around practice and design”.