AIA has urged the Government to consider legislative change that would allow life insurance companies to provide early rehabilitation and medical expenses.
Under the current law, primary healthcare payments are not allowed, restricting insurers to occupational rehabilitation rather than medical assistance.
AIA said that this was concerning as “early intervention is key” in rehabilitation: if a person is off work for 20 days, their chance of returning to work is 70 per cent. If they are off work for 70 days, that drops to just 35 per cent.
“For successful rehabilitation, we recommend supporting programs that seek to return people to productive work as soon as possible, which research shows improves their mental health and overall wellbeing,” Damien Mu, AIA Australia and New Zealand chief executive said.
The Financial Services Council (FSC) also urged the change, submitting a petition to the Government with over 100 signatures from members including AIA.
In a submission to the Parliamentary Joint Committee on Corporations and Financial Services, the FSC said that if the legislation was changed, “life insurers would be able to use more effective early claim intervention practices which would increase a life insured’s probability of successful rehabilitation.”
The submission said that this would then result in long-term benefits for both the individual and society.