Insurance in super up to 40% pricier than other policies, firm finds
One accounting and advice network is prompting clients to review insurance held inside their superannuation, after finding it can be up to 40 per cent more expensive than policies held out of super.
Accounting and advisory firm HLB Mann Judd assessed life insurance policies held within superannuation in the wake of the royal commission and found some worrying pricing results for investors.
“While these policies were once a cheaper option compared to retail insurance, we are finding that they are now mostly more expensive, often by as much as 25 per cent or even 40 per cent,” the firm said in a communication to clients this week.
Further, HLB Mann Judd is concerned by the quality of some coverage in default packages – particularly when it comes to the fine print.
“It is far too common to see trustees of some superannuation funds, particularly industry funds, signing off on amended policy wordings that result in significant detriment to policy holders, and often without their knowledge,” the firm said.
Accepting default insurance policies in a superannuation fund – such as life insurance, total and permanent disablement insurance, and income protection insurance – is a popular option for Australians with managed superannuation.
The royal commission has heard how insurance providers have been inappropriately dealing with their clients and prospective clients.
Earlier this month, the royal commission heard how one insurance provider sold their products over the phone to vulnerable Australian investors, including some with disabilities.