An effective superannuation system is vital because millions of Australians depend on it for affordable life insurance, Financial Services Minister Stephen Jones says.

About 5.7 million people rely on the default coverage provided by their super trustees, he told a business conference last week.

“An added benefit of the superannuation system is its ability to distribute affordable life insurance at scale. Many workers in dangerous jobs could not afford insurance any other way. And as a safety net, insurance makes a similar commitment to workers.

“That is why it is so important that we get the insurance in super piece right.”

Mr Jones says the government has been working with industry for almost two years on ways to improve the system. Trustees and insurers have raised concerns over legislative roadblocks to good customer service, and the government is working to address this.

“Our first legislative package passed through parliament earlier this month,” Mr Jones said. “It shows we’re committed to the task at hand ... and we will continue to develop the final legislative package with industry over the course of 2024 so we can expand access to quality affordable financial advice for the millions of Australians hungry for advice and information.”

Under the government’s advice reform plan, financial institutions such as super funds and life insurers will be able to provide limited advice on simple matters.