A “persistent lack of engagement” over superannuation has made it difficult for the life industry to achieve its objective of convincing fund members to keep their life cover, a survey says.

The survey by MLC Life finds that life insurance has the lowest level of engagement and understanding among fund members, compared to any other financial service. Only half of fund members think they have life cover, and even if consumers know they have life insurance only 36% of those know who the insurer is.

This makes it hard to create awareness and communicate messages that trigger action from the public, a foreword to the survey says.

It explores public engagement and understanding of the Protecting Your Super legislation, finding that more than 50% of members hadn’t heard of the legislation. This undermines industry attempts to encourage fund members to retain their life insurance arrangements.

More people would have elected to keep their cover if they had greater knowledge of life insurance in their super, the survey says.

Only a quarter of people say they have life insurance when asked directly, and when prompted about their super fund, 44% say they have life cover included in super, indicating the low level of awareness and involvement in life insurance, it says.

The survey also reveals confusion is a barrier to taking action. Of those aged under 35, 46% don’t know if they should do anything about the changes, while 25% aren’t sure what they have to do. Among all ages, 77% of those with cover and 74% of those without cover think it needs to be clearer what people should do as a result of the legislation.

Among those who knew they hold life cover and knew about the changes, 24% said they will keep their cover, 10% have made a change to their cover and only 7% cancelled the policy.

The survey also exposes significant cynicism about the life sector. It says 41% of people with life cover think the Protecting Your Super legislation is mostly for the benefit of the industry. Among those with no life insurance, 27% think it is for the benefit of the industry.