The push for property loans in self-managed superannuation funds (SMSF) is creating opportunities for life insurance advisers, OnePath National Technical Manager Graeme Colley says.

“People are looking to insure their property against risk, but they are not insuring themselves if something happens and they can’t maintain the loan payments,” he told insuranceNEWS.com.au.

“If anything happens and they can’t pay the debt, it could be disastrous if the property houses the member’s business.”

The Government relaxed the rules on SMSFs borrowing to buy property and there has been an upsurge in interest from members.

Mr Colley says advisers should look at obtaining referrals from people advising on this area, such as accountants and general insurers covering the buildings.  

By explaining the outcomes of what can happen if a fund member falls ill or dies, this should create additional business referrals for life and trauma policies.

Previously a hurdle to selling life insurance to SMSF members has been their age, with many older than 50, leading to expensive premiums.

“We are seeing more younger people creating SMSFs,” he said. “The number of funds being created by people under the age of 35 is up 5% during the past 12 months.”

Mr Colley says these younger members are easy to insure and there has been good uptake of trauma policies in this group.

“That is creating good opportunities for advisers,” he said. “SMSFs are definitely a growth area for life advisers.”