Default Income Protection for MySuper
During Sydney’s AIA Australian Group Insurance Summit, result of polled 32 executives from 26 retail and industry funds and related consultancies was disclosed.
It showed that over 50% of Australian superannuation funds will offer default income protection for MySuper.
Representatives from BT Financial Group, REST Industry Super, Rice Warner Actuaries and Chant West responded differently when the said offer was raised during the summit. Still, it showed that 55% of the respondents would include default IP as well as death and TPD insurance in their MySuper product funds.
The remaining 45% cited the following reasons for not opting for default IP:
- Protection type
- Complex incorporation of IP into salary levels
Damien Mu, AIA Australia’s Life Insurance general manager said that group insurance will be more noticeable with funds controlled by what can be done to be distinguished in a MySuper environment. He said that as a partner to many super funds, they believe that through default IP cover, there will be better protection for Australian’s income which is their most valuable asset.
Super funds, the insurers, fund mergers, group strategies for MySuper and member engagement were the major concern areas of the survey.