The Federal Government is being urged to use its May Budget to vigorously pursue the rationalisation of legacy life insurance products at the same time as clearing the way for a comprehensive income product for retirement (CIPR).
The Actuaries Institute has used its pre-Budget submission to the Treasury to drive home the need for a more proactive approach to the question of legacy life insurance products.
“Rationalisation of life insurance legacy products has been an issue for considerable time now despite general acceptance that the proposal has merit,” the submission said.
It said that the Financial System Inquiry had recommended action to resolve the situation with respect to legacy life products and the Government had accepted the recommendation.
“We therefore urge Government to pursue this measure more vigorously,” The submission said.
On the question of post-retirement products, the submission said the Actuaries Institute strongly supported the Government’s intention to remove legislative impediments to product innovation and the options to pre-select a comprehensive income product for retirement (CIPR).
“The introduction of a CIPR-style product option should deliver greater income security and protection throughout retirement,” it said.
