New research has revealed that while general awareness of insurance within superannuation is high, most Australians are still in the dark about their coverage.
The MetLife research found that 72 per cent of Australians have “limited knowledge of what they are covered for in terms of accident and illness” and that while 55 per cent of Australians believe they don’t have enough life insurance, only one-third knows how to actually calculate the amount they need.
Commenting on the findings, the CEO of MetLife Australia, Deanne Stewart said: “We’ve worked hard as an industry to raise awareness of insurance inside super and it’s rewarding to see that people are taking notice and awareness is on the rise.
“But at the same time it’s concerning that more people aren’t taking action, despite 55 per cent of those with default cover suspecting they don’t have enough.”
The survey of more than 1,500 working-age Australians came about as the result of a talk given by a woman with Stage III breast cancer at the MetLife town hall event.
Without realising that she had insurance within her super, she was at the point of selling her home when her employer pointed out to her that she did in fact have life insurance within her super.
Reflecting on this, Ms Stewart said: “That was one of those scenarios where her deep sense of relief, and even gratitude – even though it shouldn’t be gratitude towards us… it set us on this path of saying, as one of Australia’s major group insurers, how many Australians are actually aware of the insurance inside super? What role should we be playing?
“We should be playing more of an active role in making sure that as many working Australians know that they’ve got insurance inside super.”
The survey found that awareness and understanding of insurance within super was generally lower for Australian women with just 58 per cent of women knowing the amount of life cover they have. Conversely, 75 per cent of Australian men know the amount of cover they have.
Forty per cent of respondents overall didn’t know they could modify their insurance within super and 59 per cent expressed concerns that insurance companies wouldn’t pay out in the event of a claim.
Noting this, Ms Stewart said MetLife was working with super fund partners to increase awareness and engagement. She said they’d do this by reaching out to clients at key points in their lives like when a client starts a new job, gets married or when they buy a house or start a family.
She said that the industry, may not have understood the level of confusion or lack of awareness among their client base prior to the research, and that they may have even “skipped over this chapter” altogether.
Continuing, she acknowledged that increasing understanding of life insurance within super was not an easy task; however, there are three key questions that funds and members should consider to fuel their understanding.
These are:
1. What cover have you got?
“It does start with: know what cover you've got in the first place, and know what that means,” Ms Stewart said.
“Seventy-two per cent [of people] have limited knowledge of what cover they've got [so] it starts with, just know what cover you've got so that should something happen you at least know.”
2. What’s the appropriate level of cover for your needs?
Continuing, Ms Stewart said the next step is to understand whether the cover customers have is appropriate for their needs. She said MetLife and a number of super funds are currently developing a “simple tool” that prompts clients to answer a series of questions when they join a fund in order to ascertain the level of coverage needed.
“Often it can be as simple as putting in the debt and the income, and how many kids you have, and actually out of that at least getting a more appropriate level of cover. Or, for some younger members it might be dialling it [insurance coverage] right down or turning it off and making that really simple.
“I think you've got to make sure that you're making both as simple as it can be.”
3. Do you understand the level of the benefits you have?
Ms Stewart said the third key point is whether clients actually understand the benefits that come with their coverage.
“At the end of the day, we're literally working on this with our super funds at the moment.
“We want to make sure that we've got the best and smoothest digital path to those [answering those questions]… and that takes longer to get that.”
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We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
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