Australians spend more than $ 4. $ 1 billion a year of their insurance retirement assets, according to the corporate regulator, but the value for money can be very good and bad.
And although the total amount paid dropped from about $ 5 billion two years ago, insurers for MySuper accounts are still making an estimated gross profit of $ 860 million to insure the fund members.
The ASIC report found that many members did not know they had super insurance coverage or that they were paying for it.
A new analysis of 20 MySuper products by the Australian Securities and Investment Commission found that approximately 86 percent of Insured Super Members were in a default setting and may lose.
« In the extreme, some MySuper products in our sample offered more than 20 times the coverage for death and [permanent permanent disability] than others for the same type of member, » the ASIC report said.
« There are major differences in the design and pricing of default insurance. Two identical members could get very different levels of coverage depending on which superannuation product they each have. «
In some cases, the default premiums for a 30-year-old woman with similar coverage ranged from $ 29 to $ 732 per year. For a 50-year-old man, the range was between $ 40 and $ 1,480 a year.
Young workers were found to get particularly tough deals, with ASIC finding « systematic differences » in the provision rate (bonuses collected versus claims paid) for those under 30.
« Varying outcomes among groups of members like this can raise questions about fairness, » the report said.
Xavier O’Halloran, director of Super Consumers Australia, said the report confirms « what we have known about default insurance for a long time ». .
« That some groups of people get poor value from their insurance – in other words, they pay for junk, » said O’Halloran.
“Insurance in Super is intended to be a standard product that meets the needs of all Australians. However, the report notes large differences in the costs and benefits of coverage in the marketplace. «
From the 1st. As of April this year, members under the age of 25 and members with a credit balance under $ 6,000 had to opt for life insurance in the second phase of the government’s super reforms – member interests first.
Insurers anticipate an average bank transfer of about 21 ¢ for every dollar of premiums paid by super trustees, with the reserve rate for charitable funds (82 percent) being slightly higher than for charitable funds (74 percent).
The ratio is, on average, higher for all permanent disability insurance (87 percent) and life insurance (80 percent) and lower for income protection insurance (61 percent). .
« Income protection coverage is most likely to have lower claims rates than both Death and TPD coverage as insurers have a higher cost of managing regular income payments and regularly assessing whether beneficiaries are good enough to return to work, » said ASIC.
The report also found that many members did not know they had super insurance coverage or that they were paying for it. and opaque information meant many failed to make informed decisions about their coverage.
« Those who are aware of this may be discouraged from purchasing insurance because they find design features, terms and conditions and pricing difficult to understand, » it said.
« We want people to get value for money for this compromise, but insurers and super funds have made it almost impossible for people to compare products and find out which ones are good quality. «
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Australians spend more than $ 4. 1b per year of their super for insurance, says APRA, but the value for money can be very good and bad.
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Australian Securities and Investment Commission, Life Insurance, Superannuation in Australia
World News – AU – ‘Paying for Junk’: Superinsurance receives mixed rating
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