MEDIA RELEASE 1 November 2004
Australians are investing in their future, but they’re not protecting it
Despite the recent growth in the life insurance market, Australians are
still underinsured, and their willingness to invest is not being matched by the
desire to protect their future, according to Craig Extrem, National Sales
Manager of PrefSure Life’s Group Risk division.
“Consumers have been investing heavily through master trusts in various asset
classes such as the stock market and property trusts, but many people don’t talk
to their advisor about taking out any life insurance, which is also a product
offered through a master trust,” said Extrem.
“Many other members of master trusts are insured via group insurance policies –
life insurance offered as a component of their company’s superannuation scheme.
People in this situation are similarly reluctant to consider the extent to which
their life insurance component provides adequate cover.
“Whilst many people like the idea of having their life insurance integrated with
their super in this way as a one stop option, they should be a lot more
concerned about the level of cover they are getting. Few people realise that
they can, or should, voluntarily increase the level of their cover if they are
serious about protecting themselves.
“It is ironic that Australians are so willing to look after their future by
committing to long term investments, which is also reflected by the record
levels of consumer debt, but are less inclined to protect themselves against the
financial consequences to them and their families in the event of a tragedy. I
think one of the simple reasons for this is that many people feel that this sort
of thing just ‘couldn’t happen to them’,” said Extrem.
Recent figures issued by Plan For Life actuaries indicate that inflows into the
overall life insurance risk market grew by 10.9% in the 12 months to June 2004.
PrefSure Life experienced the strongest growth compared to any other insurer,
with an overall increase in inflows of 46.1% and an increase of 116.8% in the
group risk area.
In terms of percentage growth, the group market outperformed the individual life
insurance market. Inflows into the group risk market grew strongly by 16.9%
while premium sales grew by 11.9%.
“The options for life insurance are only going to get more diverse, with new
laws permitting ‘Choice of Fund’ by individual members of superannuation funds
coming into effect on 1 July next year,” said Extrem.
“Under the new regime we may see a situation where some employees choose to move
from their company’s super scheme thereby losing their group life insurance
“The disadvantage with having to revert to personal cover is that the employee
will no longer benefit from the reduced rates that group insurance policies
offer, which means it would become more expensive for the policyholder to boost
their level of cover,” said Extrem.
PrefSure Life, which recently acquired Lumley Life earlier this year, currently
services ten master trusts, including CFS First Choice, ASGARD and SMF, and is
one of Australia’s largest specialist life risk insurance groups with assets of
more than $200 million and 100,000 policy holders.
Released for PrefSure Life Limited by Dennis Rutzou Public Relations. For
further information please contact David Lizzio
or Dennis Rutzou or (02) 9413 4244.