Life Insurance becoming a lot cheaper under MySuper post 1 July 2013?

cannedhams on 03/04/2013 - 16:52

I got the blurb from my super fund about the MySuper changes after 1 July 2013.

It seems as though life/TPD cover will potentially become a lot cheaper once the changes come into effect. For example, for $4 a week I can purchase four units of cover which will each pay $86,000 on death or TPD (I'm 35).

http://www.catholicsuper.com.au/insurance_factsheet/

I assume the rates are the same for all of the various super funds.

This seems like a much better deal than the Life Insurance I am paying at the moment ($30 a month for $300,000 worth of death cover). It looks like I am better off retiring that cover and just purchasing cover through my super.

Unless you opt out, all super funds will provide two units of cover.

Anyone know much about this?

Financial

Comments

  • georgedeka on 03/04/2013 - 17:12

    MySuper is making some changes in terms of the default level of insurance and the cancel-ability of that insurance.
    The cost of cover varies greatly between funds, it is what is known as Group Insurance and the rate is negotiated based on the average age/sex/occupation for the members of the fund.

    Eg. Australian Super has a high number of young members, so the insurance is often cheaper, because young people claim less.

  • ALEvoX on 03/04/2013 - 17:26

    Be aware that the Future of Financial Advice legislation is forcing super and insurance companies to be more explicit in their fee disclosures - it's worthwhile to check any policy, adminstration or advice fees that will accompany your insurance cover under super.

    It may seem their insurance premiums are cheaper but that could be because advisor fees have been pulled out of the base premium and are instead charged from your super on a monthly/ongoing basis.

    • cannedhams on 03/04/2013 - 20:26

      Can they do that legally? What are adviser fees specifically?

      • ALEvoX on 04/04/2013 - 14:48

        Yes it is legal, you would just need to read the PDS for their super fund which should have the fees outlined.

        Adviser fees are fees payable to financial advisors/financial planners which are deducted from super and insurance policies. Often you will be assigned a planner when signing up to such products and its supposed to pay for your access to them if you need financial advice.

Login or Join to leave a comment
Login Join