Few members understand insurance inside super
Few superannuation fund members appropriately understand what they are being delivered in terms of insurance coverage, according to new research.
A survey conducted by Money Management's sister publication, Super Review, at last month's Conference of Major Superannuation Funds (CMSF) confirmed that superannuation fund executives and trustees believed less than half their members actually understood what they were getting in terms of death and total and permanent disability (TPD) cover.
The research, sponsored by major group insurer MetLife, substantially confirms the findings of a similar survey conducted at an Association of Superannuation Funds of Australia (ASFA) conference late last year, and comes at the same time as advisory groups have sought to argue the value that appropriate advice adds to the superannuation insurance equation.
It also comes amid the continuing debate around the manner in which the Future of Financial Advice (FOFA) legislation has banned the taking of commissions on insurance advice within superannuation.
Asked what percentage of their membership understood how much death and TPD coverage they had in their superannuation, nearly 70 per cent of respondents believed that more than half their members had an inadequate understanding.
More importantly, more than 40 per cent of respondents believed the numbers of members who understood what insurance was being delivered was below 20 per cent, with 23.6 per cent believing it was actually below 10 per cent.
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