Life Insurance Code changes: why businesses should not wait
Clearer rules may help, but policy structure still matters
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Australia’s life insurance sector is again focused on conduct standards, with industry attention shifting from review recommendations to the practical work of updating the Life Insurance Code of Practice.
For households, the discussion is about clearer communication, fairer claims handling and better support when people are vulnerable.
For business owners, the same themes matter in a more commercial way: a key person insurance policy is only valuable if the cover is well structured, understood and capable of responding when disruption strikes.
This development builds on our earlier discussion of the Life Insurance Code review, which highlighted how proposed changes could affect product design, disclosure, claims processes and customer support. The latest industry conversation suggests insurers will face continuing pressure to simplify explanations, reduce friction in administration and show stronger evidence that customers understand what they are buying.
That is positive, but it should not create false comfort. A clearer Code can improve minimum standards, yet it cannot fix a policy that has the wrong owner, an outdated sum insured, an unsuitable benefit type or exclusions that do not match the business risk. Key person cover often sits across revenue protection, debt repayment, shareholder agreements, succession planning and tax treatment. Each of those areas needs deliberate planning, not a once-and-forget approach.
For SMEs, the practical question is whether current cover still reflects the real value of the people the business depends on. A founder who was once mainly operational may now hold lender relationships, investor confidence and strategic knowledge. A senior salesperson may account for a large portion of recurring revenue. A technical specialist may be difficult to replace quickly in a tight labour market. These are not just HR risks; they are balance sheet and cash flow risks.
Business owners should use the Code reform period as a prompt to review three areas:
whether each insured person is still genuinely critical to revenue, operations or business continuity;
whether the benefit amount reflects current debt, replacement costs, lost profit and transition time;
whether policy ownership, beneficiary arrangements and purpose are documented clearly enough for tax, accounting and claims purposes.
It may also be worth taking time to estimate the size of the exposure before comparing cover options or speaking with an adviser. The number does not need to be perfect at the first pass, but it should be grounded in turnover, margins, liabilities and realistic disruption periods.
The message for Australian businesses is straightforward: better industry rules may make life insurance easier to navigate, but they do not replace active risk management. If a key person would be hard to replace tomorrow, the policy protecting that risk deserves attention today.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Australia's construction sector remains under pressure, with recent insolvency figures continuing to show building and construction as one of the most exposed parts of the economy. Higher material costs, tight margins, labour shortages, delayed payments and fixed-price contract stress have all contributed to a tougher operating environment for builders, subcontractors and project owners. - read more
Recent transport industry sales updates point to a more selective new-truck market, with operators weighing replacement timing against finance costs, emissions planning, availability and contract confidence. For truck businesses, that matters well beyond the showroom. A change in buying momentum can flow through to vehicle values, repair economics, insurer appetite and the way fleets should set insurance sums before renewal. - read more
Fresh small business cyber warnings are a practical reminder that digital risk is no longer just a concern for large companies with complex IT systems. For Australian tradespeople, the most damaging cyber incident may be far simpler: a fake invoice, altered bank details, a compromised email account or a scam message that looks like it came from a supplier, builder, real estate agent or client. - read more
ASIC’s continuing focus on superannuation member services has put another practical issue in front of Australian workers: insurance inside super is not just about whether cover exists, but whether members can understand and use it when they need help. Recent regulatory attention on trustee administration, communication and claims support is a timely reminder for anyone relying on salary continuance or income protection benefits through their fund. - read more
Recent transport industry reporting has again highlighted growing interest in Performance Based Standards vehicles and other high-productivity truck combinations across Australia. For operators, the attraction is clear: fewer trips, better payload efficiency and stronger productivity on approved routes. For insurers, however, the shift is not simply a matter of adding another truck to the schedule. PBS combinations can alter exposure across vehicle value, route compliance, load responsibility, driver capability and recovery after an incident. - read more
Running a cafe is more than just a business; it’s a passion for many. However, for cafe owners, the risk of an injury or illness that could interrupt their ability to work is a genuine concern. Disability income protection is crucial as it provides financial security if you're unable to earn an income due to health issues. - read more
Owning a cafe is a rewarding venture, but it comes with its own set of financial challenges. To maintain financial stability, it's crucial to understand the unique risks associated with the cafe industry. This involves not only staying informed about economic trends but also anticipating potential disruptions. Recognizing these factors is the first step towards creating a solid risk management plan for your cafe. - read more
Customer claims in a cafe can arise from many situations, from a slip on a wet floor to illness allegedly caused by food or drink. This article explains how public liability and product liability differ, where they may overlap, and what Australian cafe owners should check when reviewing their insurance. - read more
Business interruption insurance is a specialized type of coverage designed to protect businesses from financial losses due to unavoidable disruptions. Whether it's a natural disaster, a burst pipe, or a local emergency, this insurance helps ensure that the business can continue to meet its financial obligations during downtime. - read more
Cafe owners often use cars, vans or utes for deliveries, catering, supplier pickups and other business tasks. This guide explains when business vehicle insurance may be relevant, what to disclose to insurers and how vehicle cover can fit into a broader cafe insurance plan. - read more
Knowledgebase
Flood Insurance: A specific type of property insurance that covers losses and damage caused by flooding.
No comments yet. Be the first to share your thoughts.