Are You Relying on Insurance Inside Super?
The Australian Productivity Commission has recommended a complete overhaul of the multi -billion dollar business of selling default insurance cover inside super funds*.
If you have had multiple jobs or worked in multiple industries, it's likely you have more than one super fund. However, when you are no longer contributing to an old fund, it can slowly be eroded by management fees and default insurance premiums, which you probably didn't even know were still in place.
Instead of allowing the depletion of Australians’ retirement savings to continue, the Commission has proposed two major recommendations:
- Compulsory ‘Opt in’ for default insurance cover inside super (for members under age 25)
- A ban on super funds from putting in place insurance cover on super accounts where no contributions have been made for over 1 year.
If you are relying on default super insurance and assuming it will cover you in case of a serious accident or death, you may be surprised to learn the statistics:
- Sadly 38% of Australians have no life or Total & Permanent Disability insurance at all.
- Of those that have cover, the median level of default life cover meets only 61% of basic living needs, and covers only 37% of the income of the claimant.
- Often ‘Retail’ life policies are cheaper than default premiums in super, which eat away at your retirement savings and often have much less comprehensive policy definitions.
Rather than assuming everything will be ok, why not speak to Positive Wealth Management to find out of you are properly covered. Alternatively, click here to see multiple life quotes now.
Find out what cover you have, and whether it's worth what you are paying for.
We can help with super consolidation too, and will put you on the right track with your finances, to ensure you are properly protected, whilst maximising your super retirement balance, which is in your best interests.