Superannuation provider Perpetual has tackled underinsurance in life insurance head-on by ramping up default levels of cover, in some cases by more than 10 times the original amount.

Perpetual says its move to increase default cover for 32,000 Perpetual Select Super Plan members is driven by many Australians’ “well-documented underinsurance issues”.

“Super is not only the most cost and tax-effective way for most people to insure themselves, it is often the only insurance cover many people have,” Ian Pendleton, GM of Product and Fiduciary Services at Perpetual Private Wealth, said last week.

Fund trustees raised default cover across all age groups and introduced premium rate discounts of up to 40% following the appointment of life insurer AIA Australia.

Under the changes, cover for a member aged 35 to 39 rises from a minimum death cover of $35,000 to $230,000, payable for both death and total and permanent disability (TPD).

Cover for members aged 40 to 49 rises from $14,000 to $150,000 for death and TPD, while default cover for youngest members of the fund rises from $50,000 to $100,000 for the combined policy.