Insurance gap likely to expand among vulnerable Aussies

According to MetLife Australia’s new report, The Value of Life Insurance, young women and those receiving disability payments are “highly vulnerable to financial instability and may be most at risk from a lack of appropriate insurance coverage”.

The report found that legislative changes to end default insurance cover for younger super fund members and those with lower balances or inactive accounts may have unintentionally disadvantaged young women and people living with a disability, who are statistically more likely to fall into these categories. 

Wendy Tse, chief of staff, strategy and external affairs at MetLife Australia, said, “Our industry is reaching an important juncture. Increasing household financial pressures and cost of advice will likely see many Australians risk life without insurance, exacerbating Australia’s underinsurance problem. The lack of financial literacy is a contributor to this, as people fail to see the value of life insurance.

“We’ve shown that financial wellness and general wellbeing are inextricably linked. Action is needed to ensure Australians, especially the vulnerable, are able to weather the future economic pressures and make informed decisions on the protection of their lives. Insurance is about preserving a way of life, not only a means to [protect] against an adverse event.”

MetLife’s report emphasised the significance of superannuation funds engaging members through awareness and education, highlighting the need for flexible product design to align with the ever-evolving financial services and insurance industries. Additionally, the report underscored the positive impact of early intervention in achieving better outcomes.

It also expressed the importance of access to quality and affordable advice, which MetLife said can positively impact millions of Australians.

“Members should have access to the required level of advice so they can build a more confident future,” MetLife said.

The report added that providing digital solutions can transform the customer experience through faster underwriting and claims processes, easier engagement and self-serve functionality.