Can a super fund help save on life insurance?

Can a super fund help save on life insurance? | Insurance Business Australia

Insurance News

Can a super fund help save on life insurance?

Study findings reveal group insurance could halve premium prices

Insurance News

By
Jonalyn Cueto

Members who purchase life insurance through a super fund could save as much as 50% on regular premium prices, a Rainmaker Information study found.

Conducted with Plan for Life, the study had two “core elements”: the average premium value of MySuper insurance and the standardised price of insurance cover for death and total and permanent disability (TPD). It compared the costs when paid through a super fund and the cost when making a direct purchase.

Rainmaker found the “price advantage” of default super fund group insurance for death and TPD cover was 44%. For a 60-year-old, savings could be as much as $680, while for a 30-year-old, it could be $150.

“The study confirmed that super fund group insurance provides a cost-effective option for fund members across all age groups and coverage needs,” said Alex Dunnin, research and compliance executive director at Rainmaker Information.

Annual premiums decreased for super fund members as they aged, while the cost of life insurance when directly purchased has notably increased, Rainmaker said in a news release.

On average, a 50-year-old would have to pay $840 for direct insurance but only $600 for a super fund group insurance; that means a super fund would cost $240 less than when making a direct purchase.

“For a larger sum insured of $500,000, the difference in premiums gets higher in dollar terms,” said Dunnin.