POWERED BY MOMENTUM MEDIA
Super funds need to better explain insurance
Superannuation funds will be obliged to provide new members with an easily understood but detailed explanation of the funds’ insurance offerings, under proposals being pursued by the Insurance in Superannuation Working Group being headed by former TAL chief executive, Jim Minto.
Releasing its third discussion paper today, the working group has acknowledged that most of the available evidence showed most superannuation fund members simply did not understand the insurance offerings available from their funds and almost certainly did not read product disclosure statements (PDSs) because they were too lengthy or too complicated to understand.
It said the bottom line was that members risked potentially paying for multiple insurances.
“Insurance they may not need or may not be specifically appropriate to their needs”.
“In order to address these issues it is proposed that minimum standards are introduced to ensure that consistent information about insurance, including the impact of insurance cost on their account balance, is delivered to members upon joining a superannuation fund,” the discussion paper said.
It said the purpose of the insurance welcome kit would be to give members greater awareness, better information and ownership of the insurance cover they automatically receive through their superannuation fund.
The discussion paper then went on to outline the basics for such a welcome pack, including easily understood language, the inclusion of member-specific insurance information and “wording that highlights the risks and benefits of changing or opting out of insurance”.
The Insurance Superannuation Working Group is a combined exercise of the Financial Services Council (FSC), the Association of Superannuation Funds of Australia (ASFA) and the industry funds groupings, the Australian Institute of Superannuation Trustees (AIST), Industry Super Australia (ISA) and the Industry Funds Forum.
Recommended for you
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.
TAL has launched a digital solution TAL Connect for its superannuation fund partners that links super and insurance for members, with Aware Super as its launch partner.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI First Close USD
73.88 3 y p.a(%)
2
Hills International
63.66 3 y p.a(%)
3
Acadian Global Equity Long Short Class A
36.33 3 y p.a(%)
4
CFS FC Acadian Global Equity Long Short
35.96 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
32.23 3 y p.a(%)
Add new comment