Exclusive research reveals that a majority of risk advisers think an opt-out model for insurance within superannuation would best cater for the needs of clients.
Risk Adviser’s latest straw poll found that 46 (60.5 per cent) of the 76 advisers surveyed believe an opt-out group insurance model would be in the best interests of clients.
Only 18 (23.7 per cent) advisers thought an opt-in group insurance model would be best.
Curiously, 12 advisers (15.8 per cent) said neither opt-out nor opt-in would work in clients’ best interests and that group insurance should be gotten rid of altogether.
At the FSC Life Insurance Conference last month, chief executive Sally Loane noted the importance of preserving insurance within superannuation, saying it’s an important safety net for those who would not otherwise be able to afford cover.
She said the current opt-out mechanism within group insurance needs to be preserved.
“Without this, people would slip through the net,” Ms Loane said.
“It would also make insurance more expensive, potentially pricing out or removing access for many Australians who receive cover today.”
However, ClearView said in a submission to the Parliamentary Joint Committee inquiry into the life insurance industry that group insurance should be required to be offered on an ‘opt in’ basis rather than the current ‘opt out’ model.
“We believe a system which requires members to consciously opt in for group insurance in super will result in a substantial improvement in understanding what they are, and are not, covered for and how much cover they have,” ClearView said.
“This will significantly reduce the number of workers who think they, and their loved ones, are adequately protected when they’re not.