Treasury’s Quality of Advice review will determine the policy settings of life insurance for years to come and show that the Life Insurance Framework has been an effective reform that has protected consumer outcomes.

Therefore, this Review’s ultimate recommendations could be the difference between whether life insurance needs of Australians are met under a sensible framework that is in the interests of consumer outcomes, or not. 

Retention of the Life Insurance Framework is a crucial part of our broader advocacy of a simpler regulatory regime that does not diminish consumer protection. For decades Australians have been purchasing life insurance policies to guarantee the security of themselves and their families in the event they become sick or pass away. With the rise of the ‘sole trader’, it is even more important now for hard working Australians to have access to appropriate risk-based policies to protect against incidence through the thousands of Advice providers across the country. 

The Life Insurance Framework reforms were initiated back in 2018 to balance the interests of providers of financial advice in the life insurance sector with access to life insurance products to meet the insurance needs of consumers.  

The simple fact is – the Life Insurance Framework balances secure access to world class life insurance products while acknowledging the reality that the work involved in developing effective wealth plans in a consumer’s best interests, comes at a significant cost and time – in strong part exacerbated by the regulatory net such as the cumbersome advice process holding back limited advice options for consumers.  

By allowing upfront and ongoing commissions to be paid to advisers at a level that appropriately reimburses them at the commencement and throughout the life of the policy, the Life Insurance Framework can ensure the sustainability of life insurance through the advice model in the best interests of the consumer. This is especially pertinent when considering the increasing number of advisers exiting the market over the past few years and the cost of advice being inaccessible to ordinary Australians.  

Demonstrating the value the Life Insurance Framework has achieved for Australians in such a comparatively short-time, while the advice sector battles a spiralling compliance burden, is a cornerstone of FSC’s advocacy to the Review alongside intensive policy development from our members. 


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