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Connexus : Issue 41
Already institutions including Qantas Staff Credit union and Hunter united are launching their branded super solutions. Death benefits There is growing concern that not all funeral insurance policies offer customers va lue for money, says Clive Levinthal, head of product and underwriting for ClearView. Research by ASIC has found that consumer s don’t have a good understanding of f uneral cover products. ASIC recommends that consumers find out the true cost of any product before they sign up and understand there are different types of cover. One category is a funeral bond, offered only by friendly societies registered with APRA. The benefits must be used for f uneral expenses and any extra funds remain in the est ate of the bondholder. The other two types of product are insurance policies. Levinthal says that, with some of these, the concer n is that a policyholder could end up paying out more in premiums than they can receive in benefits. “ For example, if they’re paying $100 a month and the cover is $10,000, after 10 year s they’ve paid more in premiums than the sum insured.” ClearView has just introduced a new funeral insurance policy that offer distr ibutors, including mutual institutions, a guarantee that customers will never receive less than the premiums paid in the event of death. “ What that means is that where somebody buys the cover and for tunately lives for a ver y long time, we’ll pay out the higher amount,” says Levinthal.“And once you reach a certain age, in our case it’s 90, you don’t have to pay any more premiums but your cover continues,” Lev inthal says. www.clearview.com.au Where somebody buys the cover and fortunately lives for a very long time, we’ll pay out the higher amount. www.abacus.org.au 45 www.abacus.org.au 45 Banking on super We all know by now that the numbers in superannuation are mind boggling. But it’s not just the $1.3 trillion f unds under management that’s interesting. It’s the phenomenal growth that’s due to come. As the ageing population contributes more and the compulsor y contributions increase to 12 per cent, f unds under management by 2035 will be an estimated $3 trillion. Industr y super funds have gained a lot of attention and success since the introduction of compulsor y super two decades ago, says Financial Synergy CEO Stephen Mackley. “By their nature, industry funds have many parallels with mutuals in terms of their return of profit to customers in the form of better products and lower fees, and shared goals of growing the membership for the benefit of all,” he says. So does their success strengthen the case for the mutual sector to include superannuation in their product range? “ The larger banks are certainly moving to provide superannuation, and some Abacus members have also become early adopters,” says Mackley. “Already institutions including Qantas Staff Credit Union and Hunter United are delivering their branded super solutions w ith the help of Financial Synergy’s CUBS Super offering. Others, including Heritage Bank and Defence Bank, are using our exper tise to launch Retirement Savings Accounts for their members.” CUBS Super is a new concept in superannuation designed specifically for mutuals deliver ing a competitive, simple, low cost option for member s, which is largely delivered online, says Mackley. Mackley says the offering can be rebranded to marketing specifications, and that cash components are held as deposits, increasing funds under management, profit and liquidity. www.cubssuper.com.au