News

Has your insurance gone undercover?

Insurance

21/04/2021

When life doesn’t go to plan, insurance can provide you and loved ones with the financial cushioning needed to see everyone through. Fortunately, most Australians have some level of protection because of the default nature of insurance in super. But there’s a hitch and it could affect you.

In 2019 and again in 2020, the federal government introduced reforms to protect super fund members from having their retirement savings eroded by unnecessary or duplicate insurance premiums. At that time, the exact scale of underinsurance was unclear. But when the new rules kicked in, they revealed the number of insured Australians and the amount of insurance held.

Research conducted by financial consultants Rice Warner claims Australia’s underinsurance gap is widening.1 This means the difference between the cover you have and the amount you need is growing - and not in a good way.

The report found default death and total and permanent disability (TPD) cover typically meets just 65 to 70% of the insurance needs for average households, with the gap far greater for families with young children.1 Historically, default cover has been shaped to suit the ‘average’ member, with some variations to cater for age or salary. However, one size does not fit all.

If you haven’t checked in on your insurance lately, it’s possible you could be one of the underinsured. If something were to happen out of the blue, being underinsured means you may not have enough to pay off debts, cover important expenses, or replace the income of a missing partner, spouse or parent. The good news is, we have made sorting out your insurance cover easy.

What is my existing cover?

When you joined, you may have automatically received default insurance cover with your super account. To view your existing cover, log in to Member Online and head to the Insurance tab.

Am I underinsured?

Our interactive calculator will help you work out how much insurance you and your loved ones need to satisfy your current situation. It will also give you a premium estimate. Compare this result with your existing cover to see if you are over or underinsured.

How do I change my cover?

We make it easy for you to move the goalposts, so your cover is always aligned with where you are now. Our online insurance form allows you to submit a request to increase, transfer, reduce or cancel your cover.

Can I speak to someone about my insurance?

Sometimes it’s reassuring to get a second opinion before making important decisions. For expert advice about your insurance, call 1300 660 027 between 8am and 5pm (AEST) and ask for the VISSF Advice Team.


1 Source: www.insurancenews.com.au/life-insurance/super-reforms-reveal-scale-of-underinsuranceOpens in new window

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