Our policy issues in focus

The life insurance industry is central to the financial wellbeing and resilience of Australians and the broader community.
As the leading voice of life insurance in Australia, we advocate for national policy settings that expand Australians’ access to the life insurance protection that suits them when they need it most.
Take a closer look at some of the policy issues and topics we’re working on with our members and with the Federal Government.

Policies

Australians should be able to easily access life insurance products that provide them with the cover they need.

Current areas of focus to support an accessible life insurance market in Australia include:

  • Insurance in superannuation: insurance is an important feature of the superannuation system and ensures most working age Australians have a base level of insurance coverage and the option to increase their cover within superannuation, subject to underwriting; and
  • Financial advice: increasing the availability of life insurance advice is essential to ensuring Australians can confidently obtain life insurance products that best suit them.
CALI supports the Australian Government’s emission reduction goals of 43% by 2030 and net zero by 2050.

CALI members aim to achieve operational carbon neutrality by 2030 or sooner. CALI also supports the Government’s introduction of the climate disclosure regime and participation of life insurers, subject to appropriate timeframes and conditions

CALI and its members believe life insurers should be honest, fair and act with utmost good faith when providing Australians with insurance. We support strong government regulation and industry codes that ensure Australians can confidently access the life insurance products they need.
Life insurers are central to the financial wellbeing and resilience of individual Australians and the broader community. They provide jobs, protect families and contribute to the national economy.

The life insurance industry makes a significant contribution to the lives of Australians as part of the nation’s critical health and social settings.

This is recognised by the Productivity Commission, which believes life insurance forms an important part of Australia’s so-called risk protection system. This consists of a strong and broad insurance ecosystem that includes both private and publicly funded safety nets. The Productivity Commission has recommended that a generational review be undertaken of Australia’s risk protection and social insurance arrangements.

We support this recommendation and believe the time is right to do this important work, particularly with the national focus on the sustainability of Commonwealth programs such as Medicare and the National Disability Insurance Scheme. There is an opportunity to further contribute to the national economy and give Australians peace of mind about their future.

Protecting customer privacy is fundamental to the way life insurers do business. Our members take this responsibility seriously and have implemented a range of physical, electronic and other safety measures to protect the security, confidentiality and integrity of the personal, and often sensitive, information they hold.

Cyber security risks for Australian businesses and consumers are rapidly evolving every day.

Australia’s life insurers are taking proactive steps to ensure the life insurance industry stays up to date with how to best protect customer privacy and security online.

Life insurers are subject to strong prudential regulation that includes rigorous operational risk and cyber security requirements including for third party service providers.

Australians should have access to affordable advice about their life insurance needs.

The availability and affordability of life insurance advice is essential to ensuring Australians can make informed decisions about the life insurance products that best suit them.

CALI supports the elements of the Federal Government’s Delivering Better Financial Outcomes package announced in June and December 2023, which includes measures to support Australian consumers by:

  • enabling life insurers to provide Australians with limited advice on their own products, ensuring they can provide answers for simple questions when people ask
  • making it easier for superannuation trustees to provide advice to working people, including about life insurance held within their superannuation
  • removing red tape and improving transparency around the commissions advisers receive on products.

 

Australian consumers can seek advice about life insurance from a range of sources but for many people, getting that advice is too expensive or too inaccessible. There are just 16,000 financial advisers to turn to across the country and just 1,000 who are helping people navigate life insurance products.

This has resulted in an unmet financial advice need for working Australians and a growing underinsurance problem that is leaving people unprotected when times get tough. Where a consumer does not wish to engage a financial adviser, they should be able to ask life insurers directly for simple advice about their products.

Currently, it is challenging for life insurers to respond adequately to enquiries. They are wary of providing advice that could be perceived as ‘personal’ and incur penalties for non-compliance to strict industry-wide regulatory obligations. As a result, life insurers are only able to provide generic product information and tell people to engage the services of a financial adviser instead.

We recognise that genetic testing has the potential to play an important role in empowering Australians to be better informed about their health and wellbeing. It also allows them to manage any health risks through preventative actions and personalised medicine.

The life insurance industry does not want to deter people from taking genetic tests or participating in scientific research.

CALI supports a ban on life insurers using genetic tests in underwriting, with some limited Government approved exclusions to guarantee fairness for all insured Australians. The Federal Government is expected to make a decision on the future regulation of the use of genetic tests in life insurance underwriting in 2024.

Currently, the Life Insurance Code of Practice sets out how insurers will use genetic tests and ensures Australians can access a suitable level of life insurance without being asked about the result of a previously taken genetic test.

Life insurance in superannuation is a critical safety net for Australians and their families. It provides a dignified and secure retirement for people who are not able to work through to normal retirement age due to illness or injury.

Insurance in superannuation plays a critical role in Australia’s superannuation system by protecting Australians’ balances if they are not able to work through to retirement due to a major illness or injury. It has been an important feature of the superannuation system since the 1980s.

Superannuation trustees began offering life insurance through super as a way of providing affordable cover to people, including those working in higher risk occupations such as construction who would not otherwise have access to it.

Almost 10 million Australians have life insurance provided through superannuation in the form of death cover, total and permanent disability cover and/or income protection cover. For many Australians, the life insurance they hold in superannuation is the only life insurance protection that they have. ASIC has found that more than 70 per cent of superannuation accounts with insurance have the default cover automatically provided by the superannuation trustee.

This approach ensures most working age Australians have a base level of insurance coverage and the option to increase their cover within superannuation, subject to underwriting.

We believe Australians consumers and the broader economy are best served when superannuation is underpinned by life insurance. Life insurance steps in to meet the financial needs of people with a major illness or an injury, which helps protect their superannuation balance and allows them to have a financially secure retirement.

CALI is committed to taking extra care to support Australians with a mental health condition.

We recognise that some of our members’ customers may experience vulnerability due to a mental health condition. Our members are committed to treating these customers (and their family, carer or support person as applicable) with empathy, compassion and respect.

The Life Insurance Code of Practice (Life Code) sets out specific obligations to providing these customers with extra support, making claims and assisting anyone who has previously lived with a mental health condition to still access a life insurance policy.

We are committed to supporting Australians who are temporarily unable to work due to an injury or illness. We want to help them on their recovery journey so they can return to work in a safe and healthy way.

We are passionate about helping deliver the protection and certainty Australians need on their best and worst days. For Australians who suffer from an illness or injury, life insurers are currently limited in their ability to help them on the road to recovery and the return to work.

Life insurers can provide rehabilitation that has an occupational or vocational focus. However, legislation prevents them from providing targeted benefits that may otherwise be covered by a private health insurer or are covered by Medicare.

There is great potential for life insurers to develop new products and offerings that would help people recover from illness or injury and return to work. Allowing life insurers to have greater involvement in rehabilitation would help create a more complete support system for people who have an injury or illness that impacts their ability to work.

Specifically, allowing life insurers to fund medical treatment and medical expenses for those eligible under a continuous disability policy would help minimise existing gaps in Australia’s income support and healthcare system that may restrict or prevent an effective return to work. It would also provide greater scope for life insurers to fund, not just promote, evidence-based early intervention and self-management options.

Australians should have access to the right financial products to support them as they manage their financial security in retirement.

Many life insurers provide retirement income products to support Australians as they manage their financial security in retirement. We are committed to further exploring opportunities to deepen the market for retirement income products in Australia. This will provide more choice and effective solutions for the five million Australian consumers who are at or near retirement.

We are committed to treating Australian customers experiencing vulnerability with empathy, compassion and respect.

Specific obligations to customers experiencing vulnerability are included in the Life Insurance Code of Practice.

The Life Insurance Code of Practice (Life Code) sets out how insurers will assist customers through periods of vulnerability, whether they are dealing with language or communication barriers, financial difficulty, health issues, mental health conditions, legal issues or family violence.

We are committed to serving Australian women well through accessible, understandable and trusted life insurance. CALI supports initiatives to increase the participation of women in the life insurance industry, including women working in life insurers, the financial advice profession and the superannuation industry.

CALI supports initiatives to increase the participation of women in the life insurance industry, including women working in life insurers, the financial advice profession and the superannuation industry.

Through our ReCALIbrate program, CALI offers grants to female financial risk advisers to attend key industry conferences. ReCALIbrate recipients are also paired with a senior female life insurance industry leader to provide a forum for mentorship, learning, support and advice.

CALI members report to the Workplace Gender Equity Agency (WGEA) on six Gender Equality Indicators each year. CALI strongly supports WGEA’s aims of promoting and improving gender equality in the workplace and welcomes the publication of the industry’s gender equality performance.

Life insurers also know that more can be done to ensure women have access to suitable, affordable life insurance that protects them and their families when they need it most. For example, CALI is focused on working on reforms to financial advice to improve women’s access to life insurance advice, as well as working to better understand how life insurance can support specific women’s health and disability issues.

Advocacy

Publications

Death insurance pays a lump sum benefit to your loved ones when you die or are diagnosed with a terminal illness.
Total and Permanent Disability insurance pays you a lump sum benefit if you become seriously disabled and are unlikely to work again.
Income protection (also known as salary continuance insurance) pays you a regular monthly income for a specified period (usually this will be for 2 years, 5 years or up to a specified age) if you cannot work due to a temporary disability or illness.