Home / Life Insurance / Shock tactics: Industry lobbying called 'emotional blackmail'
16 September 2019
The life insurance sector’s efforts to convince politicians to vote against further insurance in super legislation is “emotional blackmail”, Super Consumers Australia says.
The advocacy group – which partners with Choice – says the industry is using shock tactics to dissuade the Senate from voting for the bill, including what has been dubbed the “Book of Death”.
Media reports last month reveal insurers have purportedly been circulating the 187-page claims case study to senators, which includes hundreds of examples of dead or injured workers who received life, disability and income protection payouts who could have missed out under the proposed changes.
The bill would make life cover opt-in for under 25s and those with low balance accounts.
Super Consumers Director Xavier O’Halloran says the lobbying is “mafia-like”.
“Life insurance lobbyists are using shock tactics to protect their profits,” he says. “We remain dismayed by the reluctance of insurers and super funds to design and price products for the needs of their members.
“We all want a system that supports people and their families who need assistance due to death or disability, but the cold hard truth is that change is long overdue, and the life insurance sector has been dragged to this point, bitterly and petulantly.”
Super Consumers says the poor understanding of the obligation to offer life insurance in super and the number of people unaware they have coverage has allowed insurers “to make fat profits from perverse outcomes”.
Treasury estimates the changes would cost insurers up to $3 billion in reduced premiums, it says.