Insurance in Super Benefits Recipients and the Budget Bottom Line
A new report released today by the
The report author, ASFA Director of Research
ASFA analysis of claims data indicates that over a working life of around 40 years:
* A fund member with an income protection policy on average has a 25 per cent chance of having a benefit being paid to them in the context of a temporary disability or medical condition
* Around five per cent of fund members over a working life will claim a Total and Permanent Disability (TPD) benefit
* Around five per cent of fund members will have an insurance policy death benefit paid to the fund member's beneficiary or beneficiaries or to the individual in the form of a terminal condition payment.
In the 2015-16 financial year, around 16,900 TPD benefit payments worth more than
There were more than 18,500 life insurance claims and nearly 37,000 income protection claims paid. Total benefits paid amounted to about
"Premiums for a given level of cover are lower across age categories between 30 to 60 years, for both genders," he said.
For women, the difference in premiums ranges from approximately 25 per cent to 55 per cent - increasing with age. Similarly for males, the difference ranges from approximately 35 per cent to more than 60 per cent - also increasing with age.
"The burden of under-insurance on society and government resources would be significantly greater without insurance in super,"
"It reduces the level of social security benefits payable due to a lack of coverage. Currently, under-insurance in relation to death, TPD and income protection costs the government more than
"In addition, many funds have reviewed and revised their insurance arrangements to better align with the needs and circumstances of their members," he said.
Funds are also working to make it even easier for members to opt out from or otherwise change their insurance cover using a variety of easily accessed methods.
The super industry continues to work collectively to improve insurance offerings through the Insurance in
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