MLC Life Insurance has welcomed the government’s inclusion of insurance in its consultation on the Superannuation (Objective) Bill 2023 and Superannuation (Objective) (Consequential and Transitional Provisions) Bill 2023.
Specifically, insurance in super was noted in the draft legislation’s explanatory materials.
“Given its broad reach, access to affordable group insurance is an important benefit of the superannuation system and is consistent with the objective. Through group insurance, the superannuation system provides a safety net that delivers valuable protection to the community and meets members’ needs at reasonable cost,” it read.
“In this vein, insurance in superannuation can help members achieve a dignified retirement, for example, where they experience early retirement due to incapacity or interrupted work patterns during their working life.”
Mark Puli, chief group insurance officer for MLC Life Insurance, has praised the consultation for its inclusion of insurance.
“The protection of life insurance is part of the promise of superannuation for the more than 24 million Australians insured through their super,” Mr Puli said.
“We’ll continue to make the case for group insurance throughout any consultation on the objective of super, as we underscore the need to recognise the integral role of insurance in super and the broader retirement system.
“As the government seeks to define the objective of superannuation, recognising the role of insurance in super is absolutely critical, and we’re pleased the government has seen fit to do that.”
Mr Puli projected that default insurance cover through super will continue to grow in importance and could become the way in which most Australians access life insurance.
“The group insurance system plays an essential role in the ongoing importance of Australia’s world-class superannuation system, providing a crucial safety net for working Australians.
“Insuring the lives and livelihoods of Australians through group insurance is of the utmost focus for MLC Life Insurance,” he added.
“Put simply, public policy must enable super fund trustees to meet their core duties to members, including the provision of insurance in superannuation, which helps to protect members’ retirement.”
The government is welcoming responses to the consultation until 29 September.
Disappointing to see even in legislative explanatory documents, the government is still of the incorrect understanding that group cover is affordable.
Might be worth providing federal ministers with an education session on how group insurance is rarely more affordable compared to its individual lump sum/IP options even with the same underlying company.
Group insurance = junk insurance.