Lawyers back PC on insurance inside super
Specialist superannuation and insurance law firm, Berrill Watson has welcomed the fact the Productivity Commission (PC) has stopped short of backing the Federal Budget move to remove insurance from account balances under $6,000.
Berrill Watson principal, Paul Watson said that his firm welcomed the draft PC report, and particularly that insurance in superannuation presents good value for money for most super fund members.
“The report states that insurance should only be included in active accounts to protect members from unnecessary account balance erosion,” he said. “Significantly, the report does not recommend removing insurance for account balances under $6,000 as has been proposed in the Federal Budget.”
Watson said that removing insurance for all accounts under $6,000 meant that all new super fund members would have no insurance cover at all, sometimes for upwards of two years, when the reality was that death and disability could strike at any time.
“This proposed change from the Budget would leave low income and vulnerable workers (migrants, single mothers, Indigenous Australians and casual workers) without insurance,” he said. “In addition, removing such a large number of people from the pool would mean higher premiums for everyone else.”
Watson said his firm welcomed the fact the PC report had recommended making insurance opt-in for people under 25.
“We agree with removing death cover for people under age 25, but still have some concerns that people under age 25 are vulnerable without insurance cover for disability,” he said.
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