Little understanding of insurance in super

Most superannuation fund executives and trustees believe that fewer than 30 per cent of their fund members actually understand the life insurance they receive via their superannuation fund. That is the disturbing finding of a survey conducted during the Association of Superannuation Funds of Australia (ASFA) national conference in Perth last month by Money Management's sister publication Super Review.

The survey, sponsored by major insurer Metlife, revealed that well over 60 per cent of respondents believed that fewer than 30 per cent of fund members actually understood the life insurance cover provided by the fund, with nearly half of those respondents believing the level of comprehension might be even worse.

The survey found that 27.5 per cent of respondents believed that only around 10 per cent of fund members understood the life insurance offering within their fund, while 16.3 per cent believed 20 per cent of members might have an understanding, while 20.4 per cent believed that 30 per cent might have an understanding.

The survey result is significant because it represents the views of mostly fund executives and superannuation trustees attending the ASFA conference and comes at a time when the Government is being lobbied around adviser remuneration for life/risk sold inside super.