Retirement
ASIC report finds poor consumer outcomes in super insurance
A new ASIC report has revealed poor outcomes for consumers seeking to engage with their life insurance within super, finding that around one in three consumers felt confused after interacting with their fund.
ASIC report finds poor consumer outcomes in super insurance
A new ASIC report has revealed poor outcomes for consumers seeking to engage with their life insurance within super, finding that around one in three consumers felt confused after interacting with their fund.
The regulator’s ‘Report 673: Consumer engagement in insurance in super’ found that “several fund members who directly engage with their insurance found the process challenging and weren’t always able to achieve what they set out to do”.
The report was based on 50 in-depth interviews with fund members who, in the last year, had reviewed the level of their insurance cover, changed the level or type of insurance cover, cancelled their insurance, changed their occupational classification within their insurance cover or compared their insurance cover before switching or consolidating funds.
The research found that the process of gaining information about insurance arrangements through super or making changes to the insurance “presented several potential hurdles to many members”, ASIC said.
“Limited knowledge and understanding of insurance in superannuation and a relative lack of confidence among members because of the complexity of web-based information were some of the issues identified’’ the regulator stated.
While most members had expected the process of engaging with their insurance to obtain basic information like how much additional cover they needed to be “a simple self-service process”, most found this was not the case, ASIC said.
“After interacting with their fund, about a third of the participants spontaneously reported that they felt confused, overwhelmed or uncertain,” the regulator stated.
The report has recommended fund trustees “significantly improve their members’ experience by improving communication to members about insurance, including on their websites”.
“Many of the problems members experienced may have been reduced or avoided if the information they sought was easy to find, clear and balanced,” ASIC said.
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