We’ve made some changes to our insurance

AustralianSuper seeks to offer insurance that strikes a balance between the sustainability and simplicity of our offer, underlying insurance needs, members’ views and preferences and affordability.

Every year, we review our insurance offer. We look at factors like cost, what we offer, claims made and paid, and legislative changes. Based on these reviews the cost of cover can increase or decrease and terms and conditions may change too.

As a result of this year’s review, on 29 May 2021, the cost of cover for Death, Total & Permanent Disablement (TPD) and Income Protection changed.

The cost of TPD and Income Protection has increased for most members, while the cost of Death cover has decreased for most members.

Members will still only pay what it costs us to provide their cover. AustralianSuper doesn’t make any profit from the insurance we provide.

Why has the cost of cover changed?

Over the past year, there’ve been fewer Death claims made by members with Blue Collar and Professional work ratings, so we were able to reduce the cost of Death cover for members who have these work ratings.

Economic conditions, along with an increase in claims for TPD and Income Protection cover (and Death cover for members with a White Collar work rating), meant the costs for these types of cover needed to go up.

It’s likely that competitor funds have also increased their insurance costs. The life insurance industry has collectively reported $1.6B in losses on risk business for the year ended 30 June 2020 and may not be able to absorb losses.

This table shows a history of increases and decreases (on average) to the cost of insurance cover for AustralianSuper Plan members since November 2006.

Nov 2006 May 2010 May 2013 Jan 2014 May 2015 May 2016 Oct 2017 May 2018 Jun 2019 May 2020 May 2021
Cost of cover change
Death -31% -22% +38% +35% -18% 0% -2% -14% +17% +2.3% -7.3%
TPD -31% -22% +38% +35% 0% 0% -13% -6% +38% +17% +7.5%
Income Protection n/a n/a +25% +75% -28% 0% -21% -20% +9% +19.3% -6.8 to +61.9%*

Following the change, the cost of cover compared to the estimate of members’ average salary, equates to 0.72% for AustralianSuper Plan members. This is well below the 1% cap set by the Insurance in Superannuation Voluntary Code of Practice.

How we've told members about the changes

We've distributed a Significant Event Notice (SEN) to all accumulation members – whether or not they have insurance. Distribution commenced via post and email on Tuesday 16 March and finished at the end of April.

A copy of the SEN relevant to your employees was attached to the email you received from your AustralianSuper Business Partnership Manager.

The SEN explained all the changes, provided some context about why it was necessary to make changes to insurance costs this year and let members know how they could calculate the new cost of their cover.

  • New names for two of our three work ratings. Standard has become Blue Collar and Low Risk has become White Collar.
  • The active employment test for full cover to start has changed from 1 day to 60 days. This change has aligned our offer with that of other super funds in the market.
  • Eligibility for TPD claims is now assessed differently. Members now benefit from a less restrictive assessment criteria if they have been unemployed for less than 16 months. The ability to perform Everyday Working Activities is now tested from 16 months of unemployment (previously 6 months).

Why have insurance cover with AustralianSuper?

Based on data from moneysmart.gov.au for the 2020 financial year, the industry acceptance rate average for TPD claims was 90.8%, our Insurer’s acceptance rate for TPD claims was 94.5% (overall for their clients) and AustralianSuper’s acceptance rate for TPD claims was 97.1%.

Over the past 10 years, we’ve processed more than 57,000 claims to help members and their families.

As well as financial support we offer a comprehensive rehabilitation service which members on disability claim may use. This service has assisted thousands of members with many returning to work.

* Percentage increase varies depending on member’s work rating, benefit payment period and waiting period.
This percentage represents the total premiums of default covers paid over the lifetime of an average member’s estimated lifetime earnings.

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