Individual risk products now trump group
New research has revealed that the recent surge in group life premiums mean that many superannuation fund members would now be better offer purchasing insurance cover outside of super and via an adviser.
The research, conducted by Dexx&r, suggests that the recent rise in group premiums has served to alter the conventional wisdom that insurance purchased inside super is always necessarily cheaper than that purchased individually.
"Following several years of significant premium increases in the group insurance market, members of many major super funds could now benefit from the enhanced cover and benefits provided by individual products at a significant price saving compared to the cost of similar benefits provided by their current super fund," the Dexx&r analysis said.
"If they were to arrange this cover by purchasing an individual product as a result of personal advice from an adviser the cost of advice would be included in the lower premium."
The Dexx&r analysis has been released at the same time as the company has released a new Super Comparator product which it says allows direct comparison of benefits, features and definitions between Industry, Corporate and Public Sector Funds and Individual Risk products.
According to Dexx&r principal, Mark Kachor, the premium comparison element of the new product works by converting $ per week default cover and voluntary cover premiums to an equivalent monthly or annual premium basis used by Individual Risk products.
"The long held belief that ‘group based cover in an Industry or similar fund will always be more cost effective than holding similar cover outside super' is no longer true for risk benefits offered by many large industry funds," Kachor said. "It does remain true for a select group of industry funds such as EquipSuper and UniSuper and a small number of other industry Funds. "
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