Australians are increasingly putting their life insurance through superannuation, according to new data from Aviva Australia.
In 2007, less than 3 per cent of lump sum new business was linked to the Aviva platform. For the year to 31 May 2009, lump sum protection policies linked to the platform had jumped to 14.8 per cent of new business.
"Clients have become savvier about how they stay protected in times of economic uncertainty and this trend is supported by our figures, which show an increase in life insurance held via super," Aviva Australia national distribution development manager for protection Russell Hannah said.
Hannah said placing life insurance into superannuation meant clients could maximise their tax efficiencies and also the impact of premiums on their disposable income.
It is not only life insurance though superannuation funds that is on the rise.
MLC Insurance head of products Sean McCormack said overall insurance sales had increased by 40 per cent, with much of that being channelled through superannuation.
Recent MLC data revealed that during 2006, 18 per cent of new business was through superannuation. In the June quarter 2009, this had more than doubled to make up 40 per cent of new business in the MLC Personal Protection Portfolio.
"Income protection insurance showed the biggest increase and has increased by 31 per cent for the 2009 June quarter," McCormack said.
McCormack and Hannah said they believed the trend would continue.
"The government changes as part of Simpler Super made a better incentive for holding insurance through super. There have also been calls for critical illness insurance to also be held through super," McCormack said.
Hannah said: "This is a significant jump in just two years. We anticipate this trend will continue."
According to Rice Warner Actuaries' "2009 Group Insurance Market Report", the group insurance market grew by 12.3 per cent a year in the past 15 years and was expected to grow by 11.3 per cent in the next 15 years.
