Around 800,000 Australians say they intend to buy or increase their life insurance over the next two years without a financial adviser, with more than half of these planning on tapping their superannuation fund for their coverage.
Data from Investment Trends shows that 52 per cent of Australians who plan to make unadvised changes to their insurance coverage in the next two years will do so via their super offering.
Only 19 per cent will go directly to their insurer, with 29 per cent expected to turn to their bank.
King Loong Choi, Investment Trends senior analyst, said ease of access was prompting the move.
"Most Australians will already have insurance through their super fund, and hence it may be easier for Australians to increase their cover through their super fund rather than to go to another provider," he said.
"Australians are often more trusting of their super funds and banks than insurers. This also helps to explain why more Australians are open to turning to super funds and banks, rather than individual insurers".
This comes as the life insurance industry faces heavy scrutiny, with the government urging the sector to implement as much change as possible without legislation.
Former TAL managing director Jim Minto is chairing an industry working group for insurance in superannuation that has been tasked with building and implementing a reform framework and designing a binding code of practice. The code will guide superannuation funds and insurers who are jointly responsible for providing death, disability and illness cover for more than 14.8 million Australians
Life insurers and superannuation funds have come under scrutiny after a series of life insurance scandals, including poor claims processes and high fees being charged for default superannuation sold inside funds – particularly when an account is lost or lapsed.
A parliamentary joint committee inquiry is also considering whether the industry needs reform or more oversight by regulatory bodies the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.
Mr Choi said that insurers could attempt to encourage more Australians to start thinking about life insurance by helping them to understand the benefits of life insurance and why they need it.
"Growing consumer trust is also correlated with consumer awareness – consumers are not going to trust a provider they have never heard of," Mr Choi said.
"If Australians have a better understanding of insurance, why they need it and how it works, this will help grow Australians' interest in life insurance".
