In a deal with TAL, Cbus members will see premiums reduced by 25 per cent per unit of death and TPD cover effective from 30 September, Cbus said in a statement.
This includes a 40 per cent reduction to TPD for manual members and 44 per cent to TPD for non-manual and professional members.
Premiums for income protection accident-only cover for sole traders will also be reduced by 44 per cent.
Cbus chief executive David Atkin said default cover for 15- to 20-year-olds will also be reduced.
“Recognising the need to maximise their super savings early, we have moved to reduce their default insurance costs from $7.16 per week to $2.68,” Mr Atkin said.
“These changes recognise the different needs of our members at different stages in their lives, with a focus on ensuring they’ve got the cover they need while maximising their retirement outcomes.”
Separately, Hostplus also announced its members received at least a 6 per cent reduction to their death and TPD premiums from 1 July, with members maintaining their current insurance terms and conditions through to 2020.
Hostplus chief executive David Elia said the saving is its second consecutive insurance discount in less than two years.
“We’re committed to providing great value and maximum return on our members’ investments,” Mr Elia said.
“In a period where many super funds have been challenged by increasing premiums and reduced cover, Hostplus continues to leverage our growth and scale to deliver comprehensive and affordable insurance to our members.”
It sounds nice to reduce the cost for 15 to 20 year olds. But maybe they could go one better and bloody well ask for permission before sticking their snouts in the trough. They should also disclose the commissions (or other forms of profit) they receive on these insurance premiums. I’m sick of seeing young, financially illiterate workers abused by these so-called not for profit funds. Too many kids are getting ripped off with cover they don’t need and 99% of the time they don’t know they can turn it off. Their super gets eroded away and when they finally wake up in their 30s and seek advice at a time they actually need the cover, there is stuff in their super. This is national disgrace.
Very true Old Risky. The last changes the industry fund pushed into their members for TPD was almost criminal. Unfortunately many advisers and accountants do not read the definitions and neither do the politicians who continue to decisions beyond their ability o understand the ramifications
I wonder if these two funds are operating from the Australian Super handbook, where you promote the savings on premiums in the big announcement – look at the win we’ve had for our members at the expense of those nasty insurance companies – while keeping the deterioration of the policy in the fine print? It’s all well and good to say that the premiums are going down but not so good if that means you cant claim on the policy when you need to. I’m thinking of the change to never, ever, ever going back to work TPD definition introduced by Australian Super. Or perhaps the staged TPD benefit introduced by one of the queensland based industry funds were you have to continually prove you meet the TPD definition over 5 years. Imagine the headlines that Adele Ferguson will have with stories that come out of that. And even though it’s all non-advised, union super fund provided rubbish, that wont stop her from finding an angle that will blame financial planners and risk advisers. At least with TAL being independently owned, there is no Big 4 bank standing behind them to cop the heat.
Here is a little tip for those planners who flippantly tell their clients to use an industry fund for “cheap ” life, TPD and IP insurance – when a super fund insurer reduces premiums, they usually ( yes, not always ) tighten up definitions and reduce benefits. Take time to check , for your clients sake.