Two things we should all know about our Life Insurance
Life insurance through super has been the topic of hot conversation within the superannuation sector over the past 12 months following a string of scandals.
For those members who skim past the business section of the paper, it’s important we got you up to speed on the issue of the hour.
After all, this is your nest egg that we are talking about!
So let's backtrack a little bit...
Prior to the Christmas break, the "Insurance in Superannuation Voluntary Code of Practice", which is fundamentally a glorified piece of ‘self-regulation’, was created by the insurance and superannuation industry.
With its goal of improving transparency on life insurance premiums within the $2.3 trillion superannuation fund sector and ultimately protecting consumers from bad policies, the “regulation” drew scoffs from government and consumer groups.
In fact, Financial Services Minister Kelly O’Dwyer told abc.net.au that the code was “inadequate” and threatened regulatory action.
“The government will consider an appropriate regulatory response in light of the industry’s position,” she said.
“Australians should not be sacrificing their superannuation contributions and earnings for insurance they do not need or cannot claim on."
"This is particularly important for members with low account balances as well as people with multiple accounts, especially young people who in some cases see all their super contributions eaten up by unnecessary insurance fees.”
Government concerns and a potential consumer backlash to these reforms come as other fractions of the financial services sector prepare for a possible Royal Commission into unfair practices within the big banks and insurance companies.
The review was headed by insurance industry veteran Jim Minto, who told the ABC that insurance in superannuation still remains valuable for many Australians.
"It delivers enormous benefits without underwriting and must be preserved as a unique aspect of our superannuation system," Mr Minto said.
Do you know how much life insurance you have through your superannuation and are you getting the best value on this cover?
Might you be better of with life cover outside of super?
You can always try to shop around and save with our current members only offer on Life Insurance.
Any information contained in this article is general in nature and does not take account of an individual’s particular objectives, circumstances and needs. You should consider your own circumstances and read the Product Disclosure Statement before proceeding
Source: Australian Financial Review article here on insurance in Super