EML Report Projects Significant Rise in Superannuation Income Protection Claims
Study Predicts 19% Increase Due to Changes in Workers' Compensation Eligibility
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EML has released a new white paper titled 'The Complexity Premium,' offering insights into the future of income protection claims within the superannuation industry.
The report projects a 19% increase in such claims over the next decade, primarily due to tightening eligibility criteria for psychological injuries in the Victorian workers' compensation scheme.
The study, conducted in partnership with the University of Melbourne and the Council of Australian Life Insurers, indicates that as workers' compensation settings become more restrictive, individuals who would have previously been supported through these schemes are now turning to superannuation-based income protection earlier. This shift is leading to longer claim durations and increased complexity, particularly in cases involving mental health conditions.
Superannuation funds are already observing these trends, with rising claims costs prompting adjustments in premiums. The report emphasizes the need for funds to adapt to this evolving landscape by implementing more robust claims management strategies and considering the sustainability of their income protection offerings.
For business owners, HR managers, and company directors, understanding these developments is crucial. The projected increase in income protection claims within superannuation underscores the importance of comprehensive corporate life insurance policies that address both physical and psychological health risks. By proactively managing these challenges, businesses can better support their employees' well-being and ensure the sustainability of their insurance programs.
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