People routinely check their super fund’s fees and performance but rarely do they check their insurance. While all members should pay more attention to their premiums and cover, it’s especially important for women to do so.
Women move in and out of the workforce as they raise the next generation and often shoulder the burden of caring for aged parents. Not only does it impact their super, it also has ramifications for their insurance cover.
The Productivity Commission’s report into super noted that while default insurance generally offers good value, for some members it is of no or little value – for example, disability cover that cannot be claimed against. It also took aim at opaque structures: “The lack of comparability across insurance products makes switching to better super products difficult for members and limits competitive forces.”
Over the past five years, group insurance through super has pulled in $40 billion in premiums and paid out just $21 billion in claims.
Premiums have increased by about 30% over the past few years, and while default cover may represent good value it’s worth checking whether it suits your circumstances.
Alex Dunnin, executive director of research at Rainmaker, says insurance hasn’t received the same sort of scrutiny historically that investment performance and fund fees have, but more attention is now being paid to it.
“Default insurance is a good pr