In a recent blog post, Super Consumers Australia said the introduction of universal terms would prevent certain insurers using “unfair criteria” such as activities of daily living tests to determine whether to pay a TPD claim.
“The legislation covering insurance in super says that fund trustees must act in the best interests of the beneficiaries of that insurance,” Super Consumers Australia senior policy adviser Rebecca Curran said.
“Scrapping unfair ADL tests and making it easier for people to understand and compare different policies would show that funds are genuine about meeting this obligation.”
The group pointed out that Treasury had consulted on the introduction of universal terms in group insurance as part of its response to the Hayne royal commission, but that progress on the issue had stalled since April 2019.
“People reasonably expect that the insurance they pay a premium for will cover them if they can no longer work due to permanent incapacity,” Ms Curran said.
“Now more than ever, people should be able to have confidence that they and their loved ones will be looked after.”
The group said long-term disruption to the job market as a result of the COVID-19 pandemic had “amplified inequitable outcomes” within the group insurance space, with more fund members facing stringent criteria in order to make a successful claim.
According to data analysed by Super Consumers Australia in 2019, more than a quarter of group insurance policies applied an ADL test to part-time or casual workers when assessing their eligibility.
Workers stood down due to the pandemic would also be affected if the government proceeded to withdraw JobKeeper in September, the group said.
Universal definitions will end up being universally terrible, sometimes it is better not to get what you ask for.
Consumer Groups should go in to the financial advice / life insurance business. They certainly have lots of suggestions that appeal including improve policy terms and conditions and reduce costs.
Here ís a thought. Change the TYPE of DEFAULT [code][/code][code][/code]insurance offered in GROUP cover in super. Just have $500,000 of ACCIDENTAL death & TPD for ALL members. Its not age based, so the costs are level. No underwriting, no reducing cover after 37. No rubbish about turning CASUAL . If a member wants insurance, see an adviser. Stops ALL the arguments from salaried wankers with part law degrees resting in sinecures in “consumer” groups who represent nobody.