The Whitepaper and Research


The CALI campaign aims to increase awareness among government, regulatory, industry and other stakeholders of the issues and challenges facing Australian life insurance consumers, life insurers and life insurance advisers.

The campaign is backed by Australian insurers Zurich, TAL, AIA Australia, and MLC Life Insurance, as well as the Financial Services Council (FSC), Financial Planning Association of Australia (FPA), and Association of Financial Advisers (AFA). 

The whitepaper is based on research conducted by specialist financial services consultancy, NMG Consulting (entitled The Australian Life Insurance Market Research Report) (research). According to CALI, part of its aim is to assist industry stakeholders to have a clear understanding of all aspects of the review of the Life Insurance Framework (LIF) reforms, which review is set for 2021.

Based on the research, the CALI campaign is calling on the Australian government and industry regulators to ensure right coverage and access to affordable financial advice are available to all Australians when considering future policy decisions.

The campaign is opposed to the situation arising of only the wealthiest 10-15% of the financially active population being able to access independent financial advice, within the next three years.

A market snapshot

Data from KPMG reveals significant insights into the state of the life insurance market in Australia. Notably, in 2018, the growth rate of life insurance direct premiums reduced from was 3.0% in 2017 to 1.6% in 2018.

Life insurance direct premiums continue to represent around 1% of GDP, with growth slowing for all distribution channels (i.e. retail, group and direct) (KPMG 2019)

Community expectations about life insurance

Australians overwhelmingly expect that the financial security of their loved ones and the lifestyles they have worked hard to create will be protected if they are no longer able to provide for them due to death, illness, or disability.

Protection against financial hardship

The research found that there was a “broad-based community expectation that Australians should be protected from the impact of such events, preferably by life insurance products from financial institutions”, as opposed to through government schemes.

The research revealed that the level of protection the community expected from life insurance was “by no means generous”. As well as avoiding financial hardship, the research found Australians expected that the kind of protection life insurance coverage would provide would, for example, secure the family home, enable their children to be educated, meet the costs of living, and put those beneficiaries of the policy in a position to be independent in the future.

The importance of good life insurance advice

How much of a difference can an adviser makes with regards to obtaining appropriate protection?

With Australians being underinsured, statistics clearly show clients that engage with an adviser on average have more than double the amount of cover in place than an individual that has not received advice.

APRA data indicates more claims are paid out when a client is working with an adviser as opposed to when insurance is purchased by individuals themselves.

Under insurance

The whitepaper says that “pockets of underinsurance are emerging”. Government policy is leading to a reduction in the ‘base’ cover or group insurance and is turning life insurance in Australia into a product for the wealthy.

The effects of contraction will be felt across the community and have implications for new-to-market life insurance consumers, including new mortgage borrowers as well as low-to-middle-income families, who tend to increase their cover through voluntary upgrades from group insurance.

The consequences of less insureds

According to the whitepaper, if the current rate of decline in life insurance persists for the next five years, it will lead to around 3,000 less claims per year owing to Australians not having coverage. Based on average claims frequency and average sum insured as reported by APRA in its June 2019 data, CALI anticipates this will amount to $680 million per year in new claims not submitted, leading to “additional misery and hardship for vulnerable Australians.

The other end of the spectrum

Additionally, CALI reports that Australians over age 50 are facing the risk of ‘over insurance’ because they have less options to obtain advice on how to trade-down premium and adjust cover as appropriate to their changing needs.

Over the past five years, Australian market changes and regulatory interventions have steadily reduced the life insurance purchasing options available to consumers.


If members of the community are unable to access financial advice to ensure that their life insurance cover addresses their specific needs, the risk of being underinsured increases and, in the event of adverse live events such as death or disablement, the result may be that their dependants are confronted with severe financial hardship.

The importance of life insurance to all Australians and the need for the wider community to have access to advice that will assist them in their ability to obtain cover that adequately addresses their specific

If you require help with understanding what’s best for you, the team at Superannuation Advice Australia can help.  Contact us today!