A requirement to consider self-managed super fund (SMSF) client insurance arrangements has provided the impetus for a new SMSF insurance offering from IOOF and Zurich.
The IOOF SMSF insurance offer includes unlimited death cover and up to $3 million Total and Permanent Disablement (TPD) cover, “highly competitive” premiums, and easy acceptance of up to $1 million.
IOOF general manager of distribution Renato Mota told InvestorDaily a catalyst for the insurance solution was a change in the regulation that required SMSF trustees to review the investment strategy of their fund and consider insurance cover for members.
“People are looking for a simple solution that allows them to implement some level of cover and also consider the requirements from a self-managed super fund perspective in a way that is simple to administer,” he said.
“There is a lack of a product in the marketplace that provides that simple solution, akin to a group life policy and master fund or a superannuation environment.”
While SMSFs are the fastest growing segment of the superannuation industry, IOOF also said it was “most underinsured” with just 13 per cent of funds holding life insurance cover for their members, according to the Cooper Review.
Mr Mota said there was an acknowledgement in Australia that there was an issue of underinsurance.
“People might debate whether the Cooper Review‘s statistics are right or not without understanding where people might have insurance outside of superannuation, so there is a bit of a debate as to how specific the issues are to self-managed super funds,” he said.
“But the reality is that there is an underinsurance problem and I think this will help address this issue in respect to self-managed super funds.”
Mr Mota added he was confident the offer would have a market because it had been designed with adviser feedback.
