{"id":27835,"date":"2014-10-23T13:26:05","date_gmt":"2014-10-23T02:26:05","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=27835"},"modified":"2024-10-16T10:56:54","modified_gmt":"2024-10-16T00:56:54","slug":"advice-critical-for-insurance-in-super","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2014\/10\/23\/advice-critical-for-insurance-in-super\/","title":{"rendered":"Advice Critical for Insurance in Super"},"content":{"rendered":"

Comparing premiums for insurance inside super is like a \u2018minefield\u2019 according to one research executive, who has urged individuals to seek advice on whether they\u2019re paying too much for cover.<\/span><\/p>\n

Chant West Head of Research, Ian Fryer<\/strong>, said there was a huge disparity between the cost of cover inside superannuation funds, with some funds having increased premiums by 150% over the past two years. Adding to the challenge of rising costs, said Mr Fryer, is the complexity that is applied by funds when calculating cover for different demographical segments, for example, by age, gender, occupation and smoker status.<\/p>\n

He provided the example of a 40 year old female, white collar worker, who could pay between $120 and $767 per year for $300,000 of cover, depending on the fund.<\/p>\n

\"Chant<\/a><\/p>\n

\u201cIt\u2019s a minefield, because competitiveness isn\u2019t uniform across all members,\u201d Mr Fryer said. \u201cYou can\u2019t say \u2018This fund is cheap\u2019 because it might be cheap for an older blue collar male but expensive for a younger white collar female. There\u2019s a lot of cross-subsidising going on, especially in non-profit funds, where males tend to get a good deal at the expense of females. It\u2019s also very common in industry funds, and some public sector funds, for younger members to pay more than they should for insurance so that older members can pay less.\u201d<\/p>\n

…the cost of insurance can have a far greater impact than fees on the size of an individual\u2019s retirement nest egg<\/p><\/blockquote>\n

The other issue that consumers face when trying to compare insurance premiums inside super is a lack of disclosure.<\/p>\n

\u201cInsurance is the worst disclosed area of superannuation,\u201d Mr Fryer said. \u201cThe Cooper Review did not address this issue and the regulators have ignored it as well. Instead, all the focus has been on fees. While this is understandable it is also very disappointing, because the cost of insurance can have a far greater impact than fees on the size of an individual\u2019s retirement nest egg.<\/p>\n

\u201cShort of comparing quotes from several funds or using a comparison tool such as Chant West AppleCheck, there is nothing in the market to help individuals gauge the competitiveness of the premiums they are paying.\u201d<\/p>\n

Further, there are differences between the non-profit segment (industry funds, public sector funds, etc) and the retail segment, such as whether cover is calculated using a unitised approach or based on salary.<\/p>\n

The average consumer has no hope of assessing whether their fund\u2019s premiums are competitive<\/p><\/blockquote>\n

\u201cThe average consumer has no hope of assessing whether their fund\u2019s premiums are competitive for them now, let alone in the future, and even qualified advisers find it a struggle.\u201d<\/p>\n

To assist in comparing premiums, Chant West has developed a new super fund insurance survey, which enables advisers to identify the relative value of cover provided by a fund. Over 230 super funds have been reviewed in the survey, based on premiums as at August 2014.<\/p>\n

For each fund, Chant West has produced an index for the five occupation types, for genders within an occupation type (eg white collar females, blue collar males) and for the fund as a whole. This enables users to see the \u2018big picture\u2019 of how competitive a fund is overall, and then drill down to see how competitive it is for a particular member segment.<\/p>\n

\u201cAdvisers can use the information in the survey tables to cut through all the obscurity and tell their client if the fund they\u2019re in represents good value for them and, if not, which other funds they might consider. And, of course, the funds themselves and their insurers can use the tables to assess their own competitive status,\u201d Mr Fryer explained.<\/p>\n","protected":false},"excerpt":{"rendered":"

Comparing premiums for insurance inside super is like a \u2018minefield\u2019 according to one research executive, who has urged individuals to seek advice on whether they\u2019re paying too much for cover.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,5,5622],"tags":[],"class_list":["post-27835","post","type-post","status-publish","format-standard","category-products","category-services","category-superannuation","headers-new"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/27835","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=27835"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/27835\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=27835"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=27835"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=27835"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}