Increasing economic pressures will widen the insurance coverage gap among vulnerable Australians unless action is taken, according to a new industry report from MetLife Australia. 

The Value of Life Insurance report, released today, asserts 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. 

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. Adding to the problem is less than half (48 per cent) of women in Australia understand at least three of five basic financial literacy concepts, meaning it further exacerbates financial vulnerability and understanding the need for protection. 

The report highlights the importance of engaging super fund members through awareness and education, the need for flexible product design to meet their needs, how early intervention contributes to better outcomes, the role of advice and how technology can be leveraged for better member experiences. 

MetLife’s Value of Life Insurance report rallies the financial services industry to improve Australia’s underinsurance gap and progress financial wellness via:  

  • Member engagement – making it faster and easier for members to interact with their insurance through digital solutions and tailoring communications to the member while educating them on how to take control of their insurance needs; 
  • Product design – developing products that meet the needs of members and are able to flex with lifestyle changes over their lifetime. MetLife’s Smart Default seeks to adjust insurance coverage with member lifestyles and fund demographics in mind;. 
  • Early intervention – treating members early has a measurable impact on their return to health and the economy. Recent research shows increased access to early intervention will save $126 billion in social and other unemployment costs; 
  • Accessible advice – ensuring access to quality and affordable advice will positively impact millions of Australians. Members should have access to the required level of advice to build a more confident future; and
  • Technology – providing digital solutions to meet customers’ and regulators’ changing needs and expectations. Digital services will transform the customer experience through faster underwriting and claims processes, easier engagement, and self-serve functionality.