Health insurer Medibank is spruiking life insurance in a big ad campaign, sending Australians on a guilt trip if they haven’t taken out life insurance. “It’s surprising that only one in four Australian adults say they have life insurance,” says Medibank’s ad. What’s the scam?
The scam is Australians are over-insured; though you will hardly hear that from the insurance lobby. There is a lot of overlap in insurance – via the likes of credit cards and super. A large number of Australians don’t need to take out separate life insurance because they already have insurance through their superannuation.
According to Xavier O’Halloran, Director at Super Consumers Australia, an advocacy group for the superannuation sector, a lot of people are unaware they have default life insurance through their superannuation. O’Halloran says that 60% of super accounts come bundled with a life insurance policy. He adds that 25% of Australians are not aware of what type of superannuation they have or whether they have any insurance through their super.
He said that before anyone rushes out to buy life insurance based on Medibank’s ads, they should first check with the superannuation fund to avoid wasting money on buying duplicate policies.
The most recent federal parliamentary report on the life insurance industry in 2018 found the year end revenue in 2017 was $34 billion, up from $28 billion the year before.