Insurer stresses crucial role of group insurance in super system

The protection of life insurance is part of the promise of superannuation, MLC Life has said in a submission to the government’s consultation paper on legislating the objective of superannuation.

MLC Life argued that there is a strong case for group insurance, noting that the group insurance system “plays an essential role” in the superannuation system.  

“Insurance through default superannuation cover will continue to grow in importance as the way in which most Australians access life insurance,” said Kent Griffin, chief executive officer of MLC Life Insurance.

“As the government seeks to define the objective of superannuation, recognising the role of insurance in super is absolutely critical.”

MLC Life Insurance’s submission supplements the industry view put forward by the Council of Australian Life Insurers and lays out several key areas of focus.

“We continue to work closely with our superannuation partners to provide appropriate cover which protects the member’s wealth from being diminished in the face of unforeseen events,” Mr Griffin said.

“Put simply, public policy must balance protection and wealth, and without adequate insurance through super, Australian families are left facing an event that would otherwise be covered and will see that wealth creation and a dignified retirement put at risk.”

MLC Life Insurance added that it supports the government’s efforts to legislate the objective of superannuation, while encouraging the government to acknowledge the critical role of life insurance as part of that process.

In February, the government issued a consultation paper seeking feedback about the benefits, phrasing, and implementation of an objective for superannuation.

The paper also set out the Albanese government’s proposed definition of the objective, which is “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.

In an accompanying statement, Treasurer Jim Chalmers and Minister for Financial Services Stephen Jones said: “Despite its central role in the retirement income system, there is no agreed objective of superannuation, legislated or elsewhere, to serve as a guide for policymakers, government, regulators, industry, and the wider community.”

“We need to change that.”