‘Incredibly high’ number of trustees hold no life insurance
A surprising number of SMSF trustees do not hold any kind of life insurance, according to research from Plan for Life.
The Plan for Life SMSF Report for December 2014 shows 84 per cent of SMSF members aged 18–64 years do not hold any life insurance.
Speaking to SMSF Adviser, Plan for Life senior marketing and research analyst Stephen Ryan-Gledhill confirmed this meant any kind of life insurance, regardless of whether it was held inside or outside an SMSF.
The report said this indicated over 630,000 SMSF trustees do not hold any form of life insurance.
Plan for Life said this is an estimate based on analysis of member age data.
Chief executive of the Association of Financial Advisers Brad Fox told SMSF Adviser's sister publication ifa this number is “incredibly high” and shows an enormous gap that needs to be addressed.
Mr Fox also noted SMSF trustees have an obligation to consider insurance.
“Whether that insurance is held inside or outside the fund is a decision for the trustee to make but I think it would be a huge leap of faith to think that a significant percentage of these uninsured trustees consciously addressed the issue and made a decision,” he said.
Mr Fox said given that the majority of trustees still rely on accountants, accountants need to consider what responsibilities they have in helping trustees to meet all their obligations.
“This is a fantastic opportunity for accounting and financial advice professionals to work together to create better outcome for all concerned, especially the members of SMSFs,” he said.
The research also showed that the proportion of funds drawing a retirement pension is much higher than it is among retail allocated pension funds.
According to Plan for Life, there are now $291 billion worth of SMSF funds in the draw down phase while there is a total of $153 billion in the draw down phase for retail super funds.
Written by Miranda Brownlee and Scott Hodder
Thursday, 15 January 2015
www.smsfadviseronline.com.au
Hot Issues
- ATO encourages trustees to use voluntary disclosure service
- Beware of terminal illness payout time frame
- Capital losses can help reduce NALI
- Investment and economic outlook, August 2024
- What the Reserve Bank’s rates stance means for property borrowers
- How investing regularly can propel your returns
- Super sector in ASIC’s sights
- Most Popular Operating Systems 1999 - 2022
- Our investment and economic outlook, July 2024
- Striking a balance in the new financial year
- The five reasons why the $A is likely to rise further - if recession is avoided
- What super fund members should know when comparing returns
- Insurance inside super has tax advantages
- It’s never too early to start talking about aged care with clients
- Capacity doubts now more common
- Most Gold Medals in Summer Olympic Games (1896-2024)
- SMSF assets reach record levels amid share market rally
- Many Australians have a fear of running out
- How to get into the retirement comfort zone
- NALE bill passed by parliament
- Compliance focus impacts wind-ups
- LRBA interest rates increase for 2025
- Income-free areas set to increase from 1 July
- Most Spoken Languages in the World
- Middle-to-higher incomes boosting SMSF growth
- Investment and economic outlook, May 2024
- Transitioning into retirement: What you should know
- Plan now to take advantage of stage 3 tax cuts
- Deeming freeze a win for Age Pensioners
Article archive
- April - June 2024
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
- January - March 2015
- October - December 2014
January - March 2015 archive
- ATO urges caution on pensions
- Market Update - February 2015
- Aussie economy shifts gears as structural changes take hold
- The catch 22 of retirement savings
- Are there reasons to help the tax man do his job?
- Some financial terms explained
- Small business paradox
- Good financial planning finally has a value: 23% more income in retirement
- Market Update - January 2015
- ‘Incredibly high’ number of trustees hold no life insurance
- SMSFs in 2015 Budget’s firing line
- Rebalancing resolutions
- Hammering away at asset allocation is only part of the retirement income solution
- Market Update – December 2014