Income protection cover within superannuation is considered among the most valuable components of group life insurance, a new AIA Australia survey shows.

But while one-third of respondents rank income protection as the most important element, only 21% have it.

The insurer questioned 1000 Australians about life cover inside super.

Most respondents believe receiving an income stream, rather than a lump sum, is invaluable for maintaining lifestyles when unable to work.

“The cost of income protection can be a barrier to purchase for many people,” AIA Chief Group Insurance Officer Stephanie Phillips said.

“Yet they are willing to pay for the inclusion of income protection within their super, saying they would pay almost $60 per month to cover 75% of their income.”

Respondents strongly favour product concepts that help them return to work, including retraining, practical support to engage in occupational rehabilitation and earlier notification of claims, providing faster access to support.

Ms Phillips says members support super funds’ product design initiatives.

“There is an increasing shift to offering income protection, extending benefit periods, better aligning benefits for temporary and permanent disablement and changing how lump sum disablement benefits are paid,” she said.

“The challenge for trustees is ensuring insurance benefits support a member’s endeavour to return to work and recognising the cost of insurance is reducing the member’s retirement savings. Achieving this balance is difficult but achievable.”