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.
Have been writing about the rip-off that is insurance via Industry Super Funds for some time. The cost of cover is significantly more expensive that retail advised cover via an adviser, it is better quality, better definitions, owned/controlled by the individual not the group trustee.
I’ve tweeted about this to the people who love to bash advisers – Adele Ferguson, John Collett, ABC, CHOICE, et al – but hear nothing. Obviously doesnt fit with their political & philosophical agendas to be criticising the Industry Funds
Yep we have highlighted this to clients and media commentators too.
And yep, the RC, the media, Choice etc seem to have zero interest in this ISA massive rip off.
It’s good for people who can’t get retail insurance I suppose
Yep if they can’t get other cover with underwriting then it’s great
I wonder if we should compare the pair?
Well well well who would have thought. And if the Coalition hadn’t finally agreed to the Royal Commission none of is would have been any the wiser.
All the rorts are finally being exposed and maybe it would be a good thing to continue the investigation and lets hear more cases. The public needs to hear more about these ripoffs so we can know who to not trust in future.
Um, except this rip off by ISA funds was exposed by a private firm and not the politically charged RC that conveniently neglected to look too hard in their direction. But I agree, about time these rip offs are brought out into the light so we know who to trust and importantly, not trust.