Insurance sting for industry fund members
Two of Australia's largest industry superannuation funds — AustralianSuper and REST - have lifted the cost of insurance to their members.
The two funds, who have their group insurance needs met by separate insurers, have announced substantial increases with AustralianSuper's changes resulting in AustralianSuper from 29 June, this year, increasing the cost of its death and total and permanent disability cover by around 38 per cent, while the cost of income protection cover will increase by 25 per cent.
AustralianSuper's group insurance provider is TAL.
By comparison, the retail industry fund, REST, has increased the cost of its death cover by around 45 per cent, with TPD increasing by 30 per cent and income protection increasing by 3 per cent.
Informing members of the increases, AustralianSuper said "insurance prices in Australia have risen significantly recently. This is due to rising operational costs faced by insurance companies, an increase in claims and new rules that require insurance companies to hold more money to support their business'.
"We're an industry fund run just to benefit members, so we only increase costs when we have to. We can't prevent this cost rise - but as Australia's largest industry super fund, we've used our size and scale to minimise the impact on our members."
For its part, REST was less specific about the increased cost to members but flagged that it would be communicating with them individually.
It said, however, that "premiums needed to increase, in line with the industry, due to a large increase in claims".
REST's group insurer is AIA Australia.
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