Super funds pay $5bpa on claims
SUPERANNUATION funds are paying out almost $5 billion a year to members for death, disability and income protection insurance claims.
According to research by the Association of Superannuation Funds of Australia, there were 72,400 successful insurance claims by fund members in the year to June 2016.
“Most death, disability and income protection insurance held by Australians was provided through superannuation and without it, many people would have no insurance protection at all,” ASFA research director Ross Clare said yesterday. “Receiving an insurance payout is not a rare event.”
The average worker had a 25 per cent chance of claiming against income protection insurance during a 40-year work life, he said.
About 5 per cent of fund members are likely to make a successful claim against their total and permanent disability benefit and a further 5 per cent will have a life insurance benefit paid.
The report did not reveal the numbers or percentage of unsuccessful claims or the cost to members of insurance premiums.
However, Mr Clare said group insurance through super funds was substantially cheaper than buying directly through an insurance company.
On average, group insurance policies pay out 80 per cent of premiums to claimants, compared with 50 per cent by retail insurance policies.