Insurance Disclosure Issues Within Super Funds

Inadequate disclosure of insurance premiums within the superannuation sector has made it close to impossible for consumers to compare premiums.

As such, most members are unable to determine whether their premium for life insurance or income protection represents good value for money.

In an attempt to make the selection process easier, the specialist superannuation research firm Chant West has called for tighter insurance disclosure rules within the superannuation sector. Chant West additionally put forward a nine-point plan which aims to standardise future insurance disclosure within the superannuation sector and thereby aid the distinction and clarification of insurance premiums.

Chant West's May 2010 Insurance Research Report Plan recommends the following:

1. Show all premiums on the fund's public web site
2. Show all premiums gross of tax
3. Show premiums based on current age
4. Show premiums per $1,000 of cover
5. Show premiums based on monthly payments
6. Show income protection premiums excluding stamp duty
7. Show any additional administration or policy fee alongside premium tables
8. Separate insurance premiums from adviser commissions
9. Show examples of insurance premiums in the PDS

Given the ongoing evolvement of insurance premiums and their associated financial security, it makes perfect sense to both clarify and highlight the costs and benefits of insurance within super funds.