The cost of life insurance premiums are set to rise for Australians over the next two years. But what is causing this rise?
The rise is expected to be around 5% for the next two years, making a typical premium $265, and this is to meet the demand for stress and depression related payouts by white collar workers.
Experts claim the pricing for superannuation insurance sector is playing catch-up with the broader retail insurance sector as its margins are being eroded by the rise in claimants.
"Over the previous four to five years prices have fallen by about 15-20% and this has seen a flood of people sign up with almost five million super accounts now including insurance," Rice Warner Actuaries Thierry Bareau told news.com.au.
"And as a result we now expect premiums to rise annually by about 5% over the next two years."
However, chief executive of life insurance specialists TAL Australia Jim Minto estimates the yearly premium increases may be closer to 10-15% over the next three years for some funds.
"In some funds, particularly aimed at office workers, this can be as high as 50%," added Minto.
