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Clients likely to opt for disability income cover inside super
Australians are likely to look for a lower cost basic disability income insurance product inside their superannuation fund to replace their existing cover, new research reveals.
Despite the attrition rate for disability income cover declining in 2014, DEXX&R's Life Analysis Report said there was a long-term trend of increasing discontinuances in the disability market.
The report said that "the disability income market has a number of unique characteristics", including a higher proportion of self-employed and small business policyholders, who are more exposed to economic conditions and business failure.
"Replacement activity in the disability income market is more likely to involve the substitution of a lower cost basic product for an existing more fully featured product or replacement of an outside super product with an inside super product to improve the client's cash-flow position," the report said.
The report found that total new premium for disability income products recorded growth of one per cent to $476 million over the year to September 2014, up from $470 million in September in 2013.
AUTHOR
Nicholas O'Donoghue
Nicholas is a journalist for Money Management and Super Review. Nicholas has several years experience as a journalist, reporting and managing websites for various news publications covering the medical and pharmaceuticals sector.
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