A joint report by The Australian Institute of Superannuation Trustees (AIST) and Industry Funds Forum (IFF), conducted by Sweeney Research, has found 51 per cent of industry superannaution fund members are underinsured by $100,000 for death cover, with the average level of cover being $189,000.
For total and permanent disability (TPD), 74 per cent are underinsured by $100,000 or more, while for income protection cover, 45 per cent are underinsured by $1000 or more a month. “While one in two super fund members have significantly less death cover than they need and three in four have significantly less TPD cover, many members significantly overestimate what they actually have,” says Damien Hill, IFF chairman.
“This means a lot of people will get a real shock if they ever have to make a claim.” The survey also found nearly 50 per cent of people have difficulty in understanding insurance terms and that a third of super fund members are unaware that their fund offers insurance cover.
