Superannuation and Life Insurance

While superannuation has increased the uptake of life insurance, it may also be contributing to a significant underinsurance problem.

Q. Did you personally decide on the amount of life cover / income protection insurance through your super or did you take the default amount?

  • 62% of those who have life insurance exclusively through superannuation said they accepted the default amount of life cover in their super (48% have life insurance exclusively through superannuation). Default levels of life insurance through superannuation may be insufficient.
  • 48% of those who have income protection insurance exclusively in superannuation said they accepted the default amount of income protection insurance cover (34% have income insurance exclusively through their superannuation). Default levels of income protection insurance through superannuation may be insufficient.

It could be argued that Superannuation gives people peace of mind as most people do have life cover under superannuation. However a vast majority of people have inadequate cover for their needs, more than 50% of people surveyed did not know how much cover they had in super.

Next: A False Sense of Security >

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