Complicated product disclosure statements contribute to underinsurance among low-income earners, according to Good Shepherd Microfinance.

“The length of documentation and absence of plain English makes the decision-making process more complex, thereby increasing the likelihood of non-insurance or underinsurance or choosing an inappropriate product,” it says in a submission to the Financial System Inquiry.

Good Shepherd proposes a concise, uniform document to simplify the process, and it has repeated its call for no-penalty fortnightly payment options.

Improved access to web-based calculators would help consumers value their assets, and should perhaps be a regulatory requirement, it says. Buyers could also benefit from access to geographical information.

Good Shepherd says search tools should help consumers find products best suited to their needs and price point.

“Similar tools have been successfully established and utilised by consumers with other financial product suites, including home loans and health insurance.”

It says the belief that governments or the community will provide bailouts in times of disaster needs to be “debunked”.

Good Shepherd says it has developed a pilot program to provide low-income earners with access to tailored finance products at an affordable price.