The poll – conducted by ifa sister title Risk Adviser – found that 78.4 per cent of the 250 respondents agreed with the proposition that the government should introduce incentives for the take-up of personal life cover, compared to 21.6 per cent who opposed the proposal.
Speaking to Risk Adviser, Aaron Zelman of MediBroker said introducing an incentive to buy insurance could make a “significant difference” in tackling the nationwide underinsurance problem.
Mr Zelman added that a government co-payment such as a ‘first insurance owners grant’ would be a great benefit to encouraging more Australians to take up risk insurance.
However, Marshall Wealth and Investment Advisers principal Mark Marshall pointed out that introducing an incentive is not a suitable solution.
“There has to be a need before the consumer will properly engage,” Mr Marshall said. “For example, in most states of Australia, self-employed persons are not covered by their state’s workers compensation scheme.
Why not keep it simple, the government could allow all insurance premiums to be tax deductible and apply taxation to the lump sum insurance benefits when a claim is paid out(not to be based on marginal tax rates but a set percentage or specified tax rate possibly based on a clients marginal tax rate at time of claim.) This could work with policies personally owned and also owned in super(being deductible to the fund and the premium rebated by the tax deduction).