MySuper will exacerbate underinsurance: Russell
MySuper could exacerbate the underinsurance problem by increasing the reliance on default insurance cover, while providers are likely to adopt the minimum required levels of cover, according to Russell Investments.
Russell has announced range of upgrades to the technology and insurance options within the Russell SuperSolution Master Trust (SSMT) and to some corporate superannuation schemes, which it said, are aimed at addressing this issue.
The upgrades include an online insurance calculator in partnership with Tower Australia that calculates how much insurance a member will need based on their age, income, dependents and marital status.
Jason Marler, director of business strategy and operations for Russell, said default options within superannuation insurance could be leaving people underinsured.
“Group insurance within super has a number of benefits; it’s tax advantaged, it is generally provided without the need for medical history, it can be met out of SG contributions (a plus for younger people who typically have less immediate cash flow), and the bulk buying power of large funds means individuals often get more competitive premiums,” he said.
Russell has also launched an online application and underwriting process, which will approve additional cover on the spot for the majority of applicants, with plans to further streamline the process of collecting information for claims.
“Rather than simply relying on the technology, we are expanding our in-house client servicing team in the insurance claims area to provide a better and more personalised experience for our members,” Marler said.
AUTHOR
Mike Taylor
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