Despite the spate of superannuation funds increasing the cost of cover, new Rainmaker analysis shows group insurance premiums fell by 7% to a four-year low of $8.7 billion.
The research, conducted over 10 years, also revealed that not-for-profit (NFP) superannuation funds have cut their premiums more aggressively than retail funds, meaning that retail fund members are paying higher-than-average premiums.
Across most age groups, annual insurance premiums for standard cover have increased by 8%.
The standard cover on average is $240,000 for young members and $80,000 for pre-retirees.
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"The cost for this cover averages $3.62 per week for a 20-year-old, before hitting a high of $9.16 per week for members aged 55," Rainmaker said.
During 2020-21, members aged 30 and under saw their premiums increase by $10,000 or 17%. Retail funds have increased premiums by $9000-$17,000 across these age groups.
NFP funds on the other hand increased premium values by $2000-$9000 for the same age groups.
The largest group insurance players based on member numbers are TAL (37%), AIA (22%) and MetLife (14%).
ASIC estimates that 86% of superannuation members with insurance are on the default settings.
"Many superannuation members are not even aware that they have insurance through their superannuation, or that they are paying for it. Those who are aware may be deterred from engaging with their insurance because they find design features, terms and conditions, and pricing difficult to understand," the regulator's Default insurance in superannuation report shows.
ASIC's review of the group insurance market found that two MySuper members will receive different covers at varying prices.
For example, a 30-year-old woman's total premium varied by 25 times (from $29 to $732 a year) and a 50-year-old man's varied by 37 times (from $40 to $1480 a year).