Australians are likely to look for a lower cost basic disability income insurance product inside their superannuation fund to replace their existing cover, new research reveals.
Despite the attrition rate for disability income cover declining in 2014, DEXX&R's Life Analysis Report said there was a long-term trend of increasing discontinuances in the disability market.
The report said that "the disability income market has a number of unique characteristics", including a higher proportion of self-employed and small business policyholders, who are more exposed to economic conditions and business failure.
"Replacement activity in the disability income market is more likely to involve the substitution of a lower cost basic product for an existing more fully featured product or replacement of an outside super product with an inside super product to improve the client's cash-flow position," the report said.
The report found that total new premium for disability income products recorded growth of one per cent to $476 million over the year to September 2014, up from $470 million in September in 2013.
The insurance company has joined this year’s awards as a principal partner.
The $135 billion fund has transitioned away from TAL Life Insurance following an “extensive tender process”.
The $80 billion fund is facing legal action over allegedly signing up new members to income protection insurance by default without active member consent.
In a Senate submission, the Financial Services Council has once again called for further clarification that the government will assess the consumer outcomes of group insurance against the enshrined objective of superannuation.