An excellent article in Saturday's SMH by Adele Ferguson and Ruth Williams made some truly thought provoking points about insurance and super in Australia. The article, entitled Devils Are In the Detail can be found online and is well worth a read. In it the journalists reveal that Australians pay $5.9 billion a year in Insurance premiums, through their super funds, which provide for income protection insurance and lump-sum payouts on death or total and permanent disability [TPD]. Most people however have no idea that they are doing so, as these "group" deals struck between insurers and super funds are structured on an "opt-out" basis. In other words, premiums are automatically deducted unless the member says otherwise.
But lack of transparency is just one of several problems with insurance within super funds. Not only are premiums skyrocketing - in some cases by as much as 200% - but when it comes to claiming on a policy, stubborn adherence to the fine print by insurance companies often results in long, stressful and costly legal wrangles or in no pay outs at all.
The lesson for all Australians is simple. Be informed about your super. If, like the majority of under insured Australian citizens you struggle to answer any the following questions then it's time to take control:
1. What is the name of your fund?
2. How much of your money is in there?
3. How is it invested?
4. What's 'under the bonnet' of these investments?
5. Have you had a risk profile done?
6. Is your fund investing your money in accordance with your profile?
7. What Insurances do you have?
8. Are they enough?
9. What is the name of the person looking after your money (fund manager)?
10. When was the last time you had personal contact with him/her?
Unsure of some of the answers?
Take control today!
Find a reputable financial adviser to act on your behalf. It's a myth to believe that financial planners are only for the rich. In some cases your financial planning fees can be taken from your super account so you are not out of pocket when it comes to your actual monthly budget.
In addition to enabling you to answer all of the above questions with confidence and keeping you in the loop on an yearly basis, working with a financial adviser has two other vital benefits:
* Your adviser works with your constantly changing life circumstances ensuring your protection is current and your wealth building startegies are effective.
* When things go wrong and you are at your most vulnerable, your adviser will handle the claims process and work with your insurance companies and super funds to make sure you get all the help you need when you most need it.
Ciaran Davis and Kurt Prebble our Mortgage Choice at Sutherland/Cronulla advisers are here to assist. Give us a call today on 9521 1611. The cost of your first meeting is on us.