Following research that shows many Aussies do not understand insurance within their superannuation (super), the Association of Superannuation Funds of Australia (ASFA) is urging all fund members to check the insurance they currently have within their super fund to make sure they have the right cover for their needs.
New research commissioned by ASFA found over 40 per cent of people have a poor understanding of the insurance within their super, with males about twice as likely to say they have a very good understanding about their insurance compared to females. Most concerning was the response from younger Australians, with 1 in 5 of Generation Y (those aged under 32) reporting no understanding at all, and around 50 per cent claiming they had no understanding or that their understanding was poor or very poor.
Around 40 per cent of survey respondents also said they do not know how to choose or change their level or type of cover, with almost half of all females surveyed unsure of how to do this.
(32 years old and below)
(33-47 years old)
|Baby Boomers (48-67 years old)
||Pre-Boomers (aged 68 and above)
|Question: How well do you understand the insurance options available to you through your super?
|No understanding at all
|Very poor understanding
|Reasonably poor understanding
|Reasonably good understanding
|Very good understanding
|Question: Do you know how to change/choose your insurance options through your super fund?
ASFA CEO Ms Pauline Vamos says this may mean thousands of Australians may not have the best cover for their personal circumstances.
“Insurance provided through super plays an important role in helping to protect people from the financial shocks of unexpected events. However, many people remain in the dark about what type of cover they have and whether it's a good fit for themselves and their family. This is why it's so important to take the time to get to know your insurance cover, and ask the right questions to help you make a choice about what type and level of cover is right for you.”
ASFA has released a brief guide to insurance available through super. It includes helpful questions people may want to ask their superannuation fund or their financial adviser to assist them to determine the right insurance cover for them. It is available to download for free from the independent Super Guru website: www.superguru.com.au.
“While there's no substitute for good advice, these questions are a good starting point to help you figure out what type and level of cover is right for you and your family.”
Ten questions to ask about your super fund insurance
- What types of insurance cover do I have at the moment?
- If I die, how much will my family get?
- If I die, who decides who will get my superannuation?
- Will I get a payment if:
- I cannot work for a period of six months?
- I am terminally ill?
- I can never work again?
- If I get a payment, how much will I be paid and when?
- Can I increase my level of cover without having to be medically tested?
- What happens to my insurance if I leave the fund?
- What happens to my insurance if I change jobs?
- Who should I contact if I need to make a claim?
- What impact does paying for my insurance have on my final retirement balance?
To download a copy of the guide ‘Super insurance explained’ click here.
For more information about superannuation, visit Super Guru, an independent website that helps people understand and maximise their superannuation.
For further information, please contact:
Lisa Chikarovski: Manager – Consumer Strategy, Media and Public Affairs, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia's superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation, which aims to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.