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Issues with Life Insurance and Funeral Funds
Some of the issues with Life insurances and funeral funds include the fact that both pay out after the death of the insured and the failure to continue payments until the death of the insured can mean the payment will not be forth coming. If policies are taken out, in case of an untimely death, while a person is young so as to cover the major investments that may be undertaken as the family is expanding with the arrival of babies and the purchase of a family home and other assets so as to secure the assets for the survivors they become a burden latter in life if they live along life. A person going through a difficult financial time due to unemployment or prolonged illness may render the policy as abandoned and then closed so all the payments result in no actualized advantage for the policy holder.
‘Ms Orr also hinted at the potential for law reform, by saying the corporate regulator’s powers to intervene in some types of funeral insurance were ‘‘less than clear cut’’.’
The Christian Democratic Party is horrified to hear of this predatory behaviour of the financial institutions as they deal with vulnerable Australians and we will move to reform the law to prevent this and other unsavory behaviours of the financial industry.
There is clear evidence that funeral funds intentionally target disadvantaged groups including the Indigenous communities and sign them up to funeral funds for all their children,often the ability to service these funds long term will be a problem for these members. A long term funeral fund could mean that if the insured person lives long enough the premiums could be several times more than the benefit on offer. The failure to continue the payments would close the account and then the benefit would be forgone.
The Christian Democratic Party will work to prevent the funds from extracting excessive funds from customers and then cancelling the funds benefits after the full amount of the benefit that the plan will pay out. This is something that is immoral in our view. We will seek to limit the amount of contributions to be made in relationship to a benefit that will be paid,
‘The sordid tales of gouging of remote and regional communities included banks not having procedures to prevent charging overdraft fees to disadvantaged customers, dodgy car dealers exploiting relief payments made to Cyclone Yasi victims with skyhigh interest rates on loans, and life insurers preying on indigenous mourning ceremonies.’
The Christian Democratic Party encourages charges to be laid and against all involved in this horrid predatory behaviour, We are extremely concerned why the watch dogs set up to have oversight on the financial markets have not been able to discover this criminal behaviour and take effective action to stamp it out. We will examine why the watch dogs did not act until the Royal Commission discovered these total failures if it is because of defective legislation we will push to have the necessary powers increased so we will not see this raise it’s ugly head again.
We are further concerned with the commissions given to the signing up to financial contracts in regard to any banking, insurance, superannuation and funeral plan s we have found the ease at which people have intentionally misrepresented the contracts for the personal benefits of the consultant and the institutions have either not bothered to deliver strong customer care to the client or to actually encourage the consultant to act in this highly fraudulent manner. The Christian Democratic Party will strengthen the rules surrounding so that strong charges can be laid for beaches of this kind. We recognise that this sort of behaviour has become about because of the self regulation regime that was introduced with the privatization of the Commonwealth Bank and the floating of the Australian Dollar, it is our plan to bring in sufficient regulations so as to protect the Australian people from the predatory behaviour of the financial institutions.