People need to think beyond the standard life insurance cover provided by most superannuation funds, according to Aviva Australia.
Aviva’s general manager, group business development, Shaun Williams says that in the event of the untimely death of the main breadwinner, most Australian families will need almost $700,000 to fund a basic annual income of $30,000.
However, he points out that the majority of industry superannuation funds provide life insurance cover based on multiplying annual salary by one to two times, providing a pay-out of about $110,000.
Williams says that in circumstances where Australian Bureau of Statistics data suggests the average Australian household owes an average of $70,650, many people need to complement the cover in their superannuation plan with an individually-owed life insurance policy.
“Relying on your industry super fund to look after your life insurance needs is just not realistic,” he says. “It is just not enough money when you look at today’s costs, especially housing, which is by far a family’s largest expense.”
Williams says that while superannuation is still one of the best ways to fund retirement, it cannot be relied upon to protect income streams.
