As group insurance becomes a more central component of Australia's superannuation fund offerings, the focus has turned towards giving members an appropriate level of cover.
"We're not going to be confronting people with no cover at all, but it will be more about having the right cover ... members have no concept of the gap that they have," REST Superannuation chief executive Damian Hill told the Investment and Financial Services Association 2010 Life Insurance Conference.
Hill said the group market was responding by providing more needs-based cover, life-stage increases, automatic restatement at certain ages and responding to the casualisation of the workforce.
However, he said trustees still needed to balance retirement savings with premiums and to be aware that overinsurance could also be a problem.
"It's less important but it does exist, primarily death cover for young people and older people with no dependents," he said.
Tower Australia chief executive Jim Minto said the deals between superannuation funds and insurers would continue to get bigger.
"Sheer size is a competitive issue with scale giving higher automatic acceptance levels, greater risk appetite and risk spreading," Minto said.
He said he expected more tailoring to occur in the future, based on the needs of schemes and members.
"Group insurance was a very attractive market to be in as it was set to grow, while the direct market will remain flat," he said.
"There is a strong body of belief that life insurance through superannuation is valuable and cost effective for members. Most people only access life insurance because it is provided via employment or superannuation."
