Over half of Australians with a superannuation account are not aware that they may have access to insurance through their fund, according to research conducted by CommInsure.
The study, which examined Australians’ uptake and attitude towards insurance, found that there was a significant lack of awareness regarding the potential cover provided through a super fund.
In addition, of those that said they had insurance inside superannuation, only 18% said they had taken steps to increase their cover above the default level.
50% believed they had sufficient cover
When asked why they had not increased their cover, 56% said they could not afford it. A further 50% said they believed they had sufficient cover and 46% said insurance was not a priority.
Tim Browne, CommInsure’s General Manager of Retail Advice, said the findings were a concern, considering recent research by FSC and KPMG which found that insurance paid outside of super is nearly double that paid by an employer default fund.
“The underinsurance problem in part stems from a lack of education about the importance of having insurance in place and of understanding appropriate levels of cover,” said Mr Browne.
“Further compounding the problem, many Australians aren’t aware they may already have some cover through their super fund, while others often incorrectly assume their super provides appropriate levels.
“Whilst insurance within super is a good safety net, it may not be enough for individual circumstances and consequently could be placing the individual or family at risk,” he said.
In related CommInsure news, the Wholesale Life division has launched an online application and underwriting platform for the industry fund market.
The new online insurance solution has been introduced to two of CommInsure’s largest industry fund clients, CareSuper and HESTA.
According to the insurer, the solution is a ‘true end-to-end’ online system. Members start the process by accessing an insurance calculator to determine an appropriate level of cover, before moving to a quoting tool and online application which will provide an immediate underwriting decision.
Claire Roberts, General Manager – Wholesale Life, CommInsure, said: “Insurance is often too far down the priority list for Australians. Our system makes it easy for members to work out how much cover would provide adequate protection and helps them to put the right cover in place more easily.”
