Insurance inside super: Awareness high, but work to do

From

Deanne Stewart

Research from MetLife Australia has debunked the perception that people don’t know about insurance inside super, revealing that awareness of this default protection is high, with most working Australians knowing that it exists.

However while general awareness of insurance inside super is high, the research also revealed a significant lack of knowledge with many people unsure if they have it, uncertain how it works, and unaware of the benefits it provides.

The qualitative and quantitative research included a survey of more than 1,500 working Australians aged 18-64 years exploring awareness, understanding, and attitudes towards insurance inside super.

MetLife undertook the research after embarking on a national campaign earlier this year to help Australians understand that default insurance, which automatically comes with super, can provide a valuable safety net should the worst happen.

MetLife found that while 74 per cent of research participants were aware of insurance inside super, only 54 per cent believe they currently have it. Yet even among those who know they have cover within their super, knowledge is still alarmingly low, with 72 per cent having limited knowledge of what they are covered for in terms of accident and illness, and a further 50 per cent unaware they can change their level of cover.

Deanne Stewart, CEO MetLife Australia, commented: “We’ve worked hard as an industry to raise awareness of insurance inside super and it’s rewarding to see that people are taking notice and awareness is on the rise. But at the same time it’s concerning that more people aren’t taking action, despite 55 per cent of those with default cover suspecting they don’t have enough.”

The research also revealed that two-thirds of respondents don’t know how to calculate the amount of cover they need, suggesting many don’t know where to start to make certain their insurance inside super is meeting their needs.

Ms Stewart added: “We need to really focus on engagement, ensuring more working Australians are making the most of their insurance inside super. As industry professionals we have a key role to play in supporting people with simple steps to take control of their cover and ensure adequate protection for them and their loved ones.”

Professional guidance drives action

The research also found that while significant life milestones, including getting married or buying a home, are triggers for people to review their insurance needs, engagement is primarily driven through prompts from an industry professional, be it an adviser or a super fund.

When asked what prompted them to modify their level of insurance cover, 29 per cent – the highest proportion of respondents – said they had done so after their financial adviser recommended it, and 20 per cent said they had reviewed their insurance cover after receiving communication from their super fund.

Other triggers for action included taking out a mortgage (18 per cent), starting a family (17 per cent), and getting married (16 per cent).

Benefits unknown

When asked about the benefits of insurance inside super, the research revealed a general lack of awareness.

A total of 61 per cent said they are not aware that insurance inside super is bulk purchased and therefore generally cheaper than retail policies. Furthermore, 56 per cent are unaware of the tax benefits, and 52 per cent do not know that many super funds automatically accept people for insurance cover without requiring a health check.

Progress from simple communication

“After years of concerted effort by the super industry, 73 per cent of those surveyed say they have consolidated their super into one account. This shows that simple, clear messaging regularly reinforced does work, and is something we need to embrace when it comes to insurance inside super,” said Ms Stewart.

“At MetLife we’re working with our super fund partners to continue to raise awareness but also to drive action. We’re focused on further enhancing our digital solutions, providing a simple platform for communicating the benefits of insurance inside super, and supporting people to make changes to their cover at the press of a few buttons.”

Ms Stewart added: “It’s all about clear, simple and practical solutions to help people take action, making their insurance inside super work for them now and into the future.”

You must be logged in to post or view comments.