Life insurance through your super is simple and affordable, right? Well, a recently released report from government body ASIC actually says you could be paying much more than you need to – while still not getting value for your money.
Because life insurance through superannuation is a one-size-fits-all approach, it’s not necessarily tailored to your needs, which is why ASIC is concerned*.
Should you be concerned as well? If you want to be confident you’re getting a good deal and that you can successfully claim on your policy, it can pay to compare life insurance.
What’s really hiding behind your super’s life insurance?
The default life insurance in your super is a one-size-fits-all policy, meaning it’s not customised to you and your lifestyle. It can also mean that the quality and cost varies wildly depending on your fund and what default policy you’re on.
Even more concerning is that many Australians are unaware what they are paying for and haven’t read – or don’t understand – the terms and conditions of their super life insurance policy.
Now ASIC has advised that you might not be getting the value you expect, even though you’re paying for cover from your retirement savings – and that two identical people could have wildly different policies and costs.
Their recent report into default life cover in super highlights that two identical 50-year-old men could be paying anywhere between $40 to $1480 annually out of their super for life cover. That’s a big difference.
Get peace of mind you’re covered
More than 70% of Australians with life insurance have it through their super. And because it’s simple to run it this way, it’s easy to forget about your cover.
But that doesn’t mean the coverage in your super will be enough to maintain the lifestyle you’ve worked so hard to build if the worst happens. What’s more, ASIC says the claims process from super can be difficult or distressing for beneficiaries to navigate.
Life Insurance Comparison can help you find affordable life cover options both in and out of super.
We compare 10 of Australia’s leading life insurers, and our expert team will guide you through every step of the process – so you’re absolutely clear about what you are paying for and what your cover includes.
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This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.
*ASIC, Default insurance in superannuation, December 2020.