SMSF Insurance OptionsWealth management firm IOOF Holdings has launched a new risk offering for self-managed superannuation funds (SMSF) as a result of feedback from financial advisers.

“This offering is available now and we think it’s the best solution for SMSFs who are looking for a more cost-effective and simpler implementation of insurance within the [structure],” IOOF distribution general manager Renato Mota told financialobserver.

“In the self-managed space, insurance is generally a specialist area of advice and in the same way that a master fund has a simplified group life policy, a lot of advisers are looking for a similar solution for SMSFs.”

IOOF SMSF Insurance offers unlimited death cover and up to $3 million in total and permanent disablement cover, as well as highly competitive premiums, particularly for those over the age of 50.

In 2012, the Cooper review found less than 13 per cent of SMSFs held life insurance cover for their members and, as a consequence, proposed that SMSF trustees should be required to consider insurance as part of their investment strategy.

The federal government accepted the recommendation last year.

“The changes in the regulation have probably been the catalyst for advisers to think more broadly about their members’ needs within SMSFs,” Mota said.

“But up until recently, I don’t think the insurance component in the context of SMSFs has been front of mind for a lot of advisers.

“There’s no doubt that the complexities around retail insurance do create somewhat of a barrier and hopefully that barrier is mitigated with our offer.”

He said irrespective of whether an SMSF client really was underinsured or whether insurance was held in another form, there was an immense underinsurance problem in Australia, which also applied to SMSFs.

As part of the offer, IOOF will provide technical consultants to help advisers provide insurance adequacy support as well as guidance on strategic issues.

By Krystine Lumanta

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