Get ASX Price


Latest Financial Planning News
Articles archive
Quarter 1 January - March 2016
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 4 of 2014
Articles
We wish all our clients a Merry Christmas,a Happy New Year and a restful holiday
A great overview of investing and good Holiday reading.
The final nail in the coffin for LRBAs?
Market Update – November 2014
Online financial tools your family and friends can use.
Overcoming our behavioural barriers to saving
‘Unintended consequences’ threaten SMSF tax reform
Retirement income: every bit counts
ASFA continues to sound warnings on retirement savings
Market Update - October 2014
The little-known rule with huge implications for self-managed super funds
Grappling with the uncertainties of retirement
Change to ATO decision relevant to SMSF in-house assets
Taking a personal perspective on the global super challenge
Some terms defined - Super & Investment
The perils of market-timing and over-confidence
Market Update – 30th September 2014
Hardly a do-it-yourself job
Super insurance: wide coverage, limited understanding
ASIC eyes SMSF loan sign-off
Redesigning retirement incomes policy - from the ground up
Super insurance: wide coverage, limited understanding

 

The overwhelming majority of Australians with life and permanent disability insurance obtain that cover through their superannuation funds.


Insurance is a critical benefit of being a super fund member for most of us.



                   


 


Unfortunately, a survey by the Association of Superannuation Funds of Australia (ASFA) has found that many super fund members have a minimal understanding of their insurance cover.


This lack of knowledge can lead to members being underinsured with possibly severe financial consequences for their families in the event of death or permanent disability.


Based on a recent survey, ASFA reports that more than 40 per cent of fund members have a "poor understanding" of the insurance provided by their super fund.


Key findings include:


  • More than 40 per cent of fund members have no understanding, very poor understanding or reasonably poor understanding of the insurance in their super fund.
  • More than 50 per cent of Generation Y aged under 32, have no understanding, very poor understanding or reasonably poor understanding of the insurance in their super fund.
  • Just 12.3 per cent of members regard their understanding of insurance in super as "very good" with 46.4 per cent regarding their understanding as "reasonably good".

ASFA has published a brief guide to super fund insurance. Despite the guide's simplicity, it provides a useful starting point – particularly given that knowledge of insurance in superannuation is so limited among many members.


  • Super fund members, ASFA suggests, should ask a series of questions regarding their insurance cover. These include: What types of insurance cover do I have? If I die, how much will my family get? Can I increase my level of cover without having a medical test? What happens to my insurance if I leave my current insurance fund?
  • Having adequate insurance cover is a fundamental part of sound financial planning. It is well worth discussing with a financial planner.
  • The latest Underinsurance Research Report, published in December last year by Rice Warner Actuaries calculates that a typical couple aged 40 with children requires life cover of 10 times earnings simply to repay debts and maintain living standards.
  • How does your life and permanent disability insurance cover measure up given your family's circumstances?

 


By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia
18th September 2014


 




13th-October-2014
 

Diamond Financial Solutions
Charter Financial Planning Limited ABN 35 002 976 294
Australian Financial Services Licensee Licence number 234665
Principal Address: 750 Collins Street PO Box 2830 Melbourne Victoria 3001
Legal Disclaimer
Charter Privacy Policy | Financial Services & Credit Guide
Site Map