Christine Cupitt, CEO of the Council of Australian Life Insurers (CALI), recently addressed the Senate Economics Legislation Committee, underscoring the crucial role of life insurers in Australia.
In her speech, Cupitt pointed out the significant gap in access to life insurance advice, emphasising the country’s current advice accessibility crisis.
She referred to the Delivering Better Financial Outcomes and Other Measures Bill as a crucial step towards enhancing Australians’ access to financial guidance and supporting the efforts of financial advisers across the nation.
Research commissioned by CALI indicated that 70% of Australians are worried about the impact of living costs on their ability to obtain or maintain life insurance.
“[Australians] know they need to manage their household balance sheet, and getting professional advice on their life insurance is an important part of that. But this can cost more than $3,000,” Cupitt said.
She emphasised the need for accessible and affordable financial advice to help Australians make informed decisions that ensure financial security. Despite this need, over 25% of Australians considered seeking financial advice on life insurance in the past three months but did not proceed, with only 8% actually receiving such advice during that period.
“People need someone to talk to. Making these decisions is hard, and they should not have to do it alone,” she said.
Cupitt highlighted the high demand for accessible financial advice in Australia, with many turning to family and friends for advice – underscoring the prohibitive cost of professional guidance.
With only about 1,000 financial advisers nationwide who regularly assist with life insurance products, the availability of expert advice remains limited.
CALI is actively working with the federal government on the next phase of financial advice reforms.
The organisation supports legislation that would permit life insurers to offer simple advice on their own products, subject to strict consumer protection measures. This would allow insurers to address customers' straightforward queries without the need for a comprehensive financial plan.
For more complex financial needs, life insurers will continue to refer individuals to financial planners who can provide broader advice across various products. The proposed changes aim to offer Australians more choices without additional costs, while not interfering with the critical work of financial advisers.
Cupitt emphasised the importance of basic customer service, ensuring that life insurers can answer simple questions and help Australians make well-informed financial decisions.
“We only want to complement the important and valuable work they do, not get in their way,” she said.
Last month, the organisation launched a partner program to promote better collaboration within the Australian financial service industry by linking life insurance executives with specialists from different sectors. Equisoft, which provides digital solutions for the financial industry, joined the partnership program.
