Super funds can drive member engagement through insurance: TAL

New research from TAL suggests Australians who better understand and engage with their insurance through superannuation are significantly more confident about their financial security if they become unable to work.

The study of 2000 super fund members found confidence levels rose sharply when members actively reviewed or adjusted their insurance arrangements. This highlighted the growing importance of communication and education within the super sector.

According to the research, 18% of members who were unsure whether they held insurance through super felt financially secure against the impact of illness, injury or death. That figure climbed to 52% among those with default cover and 77% for members who had tailored their insurance to suit their circumstances.

The findings comes as insurers and super funds face increasing pressure to improve member engagement amid rising living costs and greater scrutiny of insurance inside superannuation.

TAL general manager of group partnerships Dan Taylor said the research showed insurance delivered value beyond the claims process itself.

He said members who understood their cover were more likely to feel financially prepared and less likely to experience confusion or frustration if they later needed to make a claim.

The research also pointed to a broader trust opportunity for super funds, with more than eight in 10 respondents indicating they trusted their fund to provide guidance on insurance matters.

However, engagement gaps remain, particularly among younger and female members. Many members aged between 25 to 34 were unaware whether they had default cover. Moreover, women were less likely than men to review or alter their insurance arrangements. This is often due to low engagement or misconceptions, highlighting the need for targeted guidance, the research said.

The report noted changing workforce patterns, career breaks and part-time employment could leave some members underinsured, particularly women with lower super balances.

TAL said more personalised communications, digital tools and guidance tied to major life events could help funds improve engagement and ensure members better understand the protection available through their superannuation.