Superannuation members still do not realise they are entitled to life insurance via their super funds despite concerted effort to raise awareness, new research finds.
MetLife's latest Insurance inside super report found 73% of Australians are aware they can access life insurance inside their super. One-in-two members however, know what type of cover they have.
Despite the recent media spotlight on the financial services and super industry, not much has changed in the number of Australians that are aware they have access to life, TPD and income protection cover through super, MetLife said.
Nearly 40% of super fund members who were aware they had insurance inside super did not know they could modify the level of cover, the survey showed, noting there is also a level of distrust among members.
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The majority (60%) of members reported having concerns about their insurer paying out in the event of a claim due to distrust and industry reputation, with 42% of members specifically citing reasons of distrust.
Such distrust is a significant barrier in member engagement with their super funds, the report said.
This has "significant consequences" for super funds, as members that engage with and modify insurance inside super are more likely to rate their super fund better and remain with their fund for longer.
Three-in-10 don't trust their super fund to help them understand how much life insurance they need. About three quarters of respondents trust their super fund to help them make informed decisions about life insurance.
With these numbers, MetLife has called for greater industry transparency and collaboration between super funds and life insurers to increase Australians' awareness and engagement.
To facilitate this, MetLife has launched Inside Update, which provides super fund partners and their members with a suite of best-practice tools and information designed to "empower Australians to make informed decisions about their cover".
Chief customer and marketing officer Chesne Stafford said misinformation around insurance inside super has been widespread in recent months, particularly as the Protect Your Super changes come into force.
"With thousands of Australians with inactive and low balance accounts now having their insurance switched off and the potential for more people to be affected, it is more important than ever to increase awareness and get people checking what level of protection they have and need," she said.
"We need to ensure that protection continues and people aren't caught unexpectedly without cover, so we're committed to working with the industry to increase and simplify communication about insurance inside super.
"We want to help Australians understand that it exists, why it exists and to be confident to make choices about their cover."