Insurance inside super - who understands?

In what may represent a case for superannuation funds to provide greater member or education or even retain the services of financial advisers, new research suggests less than half superannuation fund members understand their insurance cover.

The research, conducted by Super Review during November's Association of Superannuation Funds of Australia (ASFA) conference in Melbourne found that most respondents believed most fund members had an inadequate understanding of insurance inside super.

The respondents were asked what per centage of their superannuation fund membership they believed understood life insurance with the result that 73 per cent believed that more than half their members had an inadequate understanding.

In fact, the research sponsored by Pillar Administration, suggested that the best case scenario for the number of members understanding life insurance inside super was 20 per cent, with 19.8 per cent of respondents believing that as few as 10 per cent of members had an appropriate understanding.

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Significantly, respondents were slightly more positive about member understanding of life insurance in 2014 than they were a year earlier, with a similar survey conducted in 2013 revealing that more than 76 per cent of respondents believed their members had an inadequate understanding of life insurance.