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Right insurance can maximise superannuation
Selecting an appropriate industry superannuation fund could save members up to $60,000 in retirement through lower insurance premiums, according to Chant West research commissioned by NGS Super.
The future-inflation adjusted figure is based on savings in death and total and permanent disablement (TPD) cover comparing NGS premiums against 32 top retail funds.
Based on $300,000 of coverage, a 26-year-old female non-smoker would have $59,712 more at age 65 ($12,684 in today’s dollars) in NGS compared to if she was in a median white collar retail fund, which include average adviser commission of 19 per cent, NGS stated.
The difference in premiums increased with age, such that at age 26 a female non-smoker would pay 59 percent higher annual premiums in a median retail fund than in NGS Super. That rose to 143 per cent at age 40 and 208 per cent at age 65, the research found.
There is often a focus on administration fees when discussing the costs of super but insurance premiums can have a big impact, said NGS Super chief executive Anthony Rodwell-Ball.
The message is to ask questions about all costs and fees when choosing a super fund, he said.
“Firstly, check that the amount you’re insured for is sufficient, and then consider whether the cost is competitive,” he said.
The projections were done using reasonable assumptions for investment return and inflation, NGS stated.
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