New research by MLC Life Insurance following the Protecting Your Super reforms package shows that 35 percent of superfund members who contacted their fund have elected to retain their life insurance.
With nearly half (48 percent) of superfund members being aware of the PYS reforms, MLC Life Insurance Chief of Group and Retail Partners, Sean McCormack, noted there was still room for greater member engagement despite an industry sponsored awareness campaign.
The reforms include elements such as:
- The automatic consolidation of small balance inactive superannuation accounts
- A requirement for trustees to cancel insurance for inactive accounts where no contributions or rollovers have been received for 16 months.
These measures open the potential to see some clients’ policies cancelled.
As previously noted by AFA CEO, Philip Kewin, advisers can take positive steps to help clients retain their life policies (see: Advisers Cautioned on Potential Insurance Cancellations…).
The MLC research also reveals that while 43 percent of superfund members believe the PYS reforms have increased trust in the financial services industry, 44 percent of superfund members with life insurance haven’t heard of the PYS reform. McCormack says further reforms such as the Putting Members Interest First Bill may leave many Australians without adequate life cover.
Importantly, however, 70 percent of superfund members who were unaware of PYS would have liked their fund to have contacted them, and 75 percent of members also would have liked more clarity on the actions they needed to consider as part of the reform.
