POWERED BY MOMENTUM MEDIA
The value of insurance within super
The Government would be wrong to move to remove life insurance from being a core offering within superannuation, according to the Actuaries Institute.
The Institute used its pre-Budget submission to the Treasury to argue that life insurance within superannuation plays a vital role and actually generates cost-savings to the Government.
Echoing arguments it recently put to the Productivity Commission, the Institute noted that Australia’s life insurance penetration rates were amongst the highest in the world because of its distribution through the superannuation channel.
However, it said despite this, there was still an underinsurance gap and that the superannuation system ensured that all working lives received a basic level of cover, and developments in technology would allow for this to be increasingly tailored to individuals’ needs.
The submission said that calls for removal of the current levels of [insurance] coverage would remove coverage for millions of Australians and place an increased burden on government, primarily through increased social security payments.
Addressing suggestions that removing insurance from super would generate cost savings, the Institute said it was important to remember that almost all the existing legal infrastructure/costs of evaluating disability and identifying and paying dependents would need to remain in place.
It said this was because accumulated savings would still need to be distributed in the event of death and disability.
“Insurance in super efficiently utilises these existing processes to provide greater benefits to members,” it said.
AUTHOR
Mike Taylor
Recommended for you
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.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
