Changes to insurance

Date of this notice

15 Feburary 2021

Purpose of this notice

This notice explains the changes that will be made to insurance arrangements described in the updated LUCRF Super Product Disclosure Statement (PDS) and Insurance Guide available from 1 April 2021 here.

What’s changing?

The insurance premiums for Death & TPD and Death Only insurance cover will increase (depending on age, work category, type and amount of cover).

When will the change occur?

1 April 2021

How will this change affect you?

Up to 31 March 2021, insured members will pay the Death &TPD and Death Only premium rates per the current Insurance Guide dated 1 April 2020.

From 1 April 2021, insured members will pay the Death &TPD and Death Only premium rates per the new Insurance Guide dated 1 April 2021.

For example, for members with default Death and TPD insurance cover:

Cost per week per 2 units of Light Blue Fixed Premium cover (default) 1
Current age	Current premiums (to 31 March 2021)	New premiums (from 1 April 2021)
14-24	$1.28	$1.70
25-29	$2.14	$2.83
30-34	$2.98	$3.97
35-64	$3.78	$5.05
65-69 2	$2.55	$3.40

¹ Premium rates are shown net of tax (factoring in a 15% tax rebate on the gross premium rates). Gross premium rates can be found in the updated policy. Premium figures are indicative. The actual premium amounts deducted from your account may be subject to rounding as they are calculated.
² TPD cover is restricted to TPD Definition 3 or 4 once you’re 65 and over on the event date (see ‘TPD definitions’ in the Additional Summary below for more information).

The full list of current (to 31 March 2021) and new (from 1 April 2021) premium rates are provided in Tables A-D under ‘Additional information’ below.

Case Study: Andrew

Age: 40
Occupation: Storeperson (Light Blue work category)

Example A: Default cover (Fixed Premium)
Andrew has two units of Death & TPD cover, which, for a 40-year-old, is $94,000 of cover. Until 31 March 2021 he's paying $3.78 per week. From 1 April 2021 he'll pay $5.05 a week.

Example B: Fixed Amount cover
Andrew has Death & TPD Fixed Amount cover of $100,000. Until 31 March 2021 he's paying $2.09 per year per $1,000 of cover (a total of $209 per year). From 1 April 2021, he'll pay $2.79 per year per $1,000 of cover (a total of $279 per year).

What are insurance premiums for?

Insurance premiums cover the cost of any insurance cover you hold on your LUCRF Super account. The premiums deducted from your account are sent to the insurer on a quarterly basis. The increase in premiums is not being retained by LUCRF Super.

What do you need to do about this change?

There’s nothing you need to do.

The Death & TPD and Death Only premiums will automatically increase from 1 April 2021, and any future deductions from your account will be at the new rate.

Death & TPD (Fixed Premium) - Table A

Death Only (Fixed Premium) - Table B

Death & TPD (Fixed Amount) - Table C

Death Only (Fixed Amount) - Table D

Date of notice

15 February 2021

Purpose of this notice 

This notice explains the changes that will be made to insurance arrangements described in the updated LUCRF Super Product Disclosure Statement (PDS) and Insurance Guide (which forms part of the PDS), both available here from 1 April 2021.

What's changing? 

We currently have a maximum of five Total and Permanent Disablement (TPD) definitions that members can be assessed under to be deemed totally and permanently disabled (needing to meet at least one):

• TPD Definition 1: Unlikely to work
• TPD Definition 2: Permanent impairment
• TPD Definition 3: Activities of daily living
• TPD Definition 4: Permanent loss
• TPD Definition 5: Cognitive loss

From 1 April 2021, there will be a maximum of four TPD definitions that members can be assessed under to be deemed totally and permanently disabled (needing to meet at least one):

• TPD Definition 1: Unlikely to work
• TPD Definition 2: Incapable of ever working
• TPD Definition 3: Permanent loss
• TPD Definition 4: Domestic duties

There will also be new definitions added to support these four TPD definitions, and revisions to existing definitions. 

The new and updated definitions can be downloaded in the additional information section below, labelled E to J.

When will the change occur?

1 April 2021

What does TPD cover provide you?

TPD cover provides a lump-sum benefit to you if you become totally and permanently disabled (as defined by our insurer). 

This may help with ongoing expenses and one-off costs that you or your dependants may face if you are permanently disabled and unable to work.

If you’re between 65 and 69, you receive restricted TPD cover. Insurance cover is not provided to anyone over 70. 

Exclusions also apply. For example, cover will not apply for any pre-existing medical conditions.

How will this change affect you?

Members who make a TPD claim with an event date up to, and including, 31 March 2021 will be assessed under the current five TPD definitions. Please note that depending on your age and employment status at the event date, you may be eligible to be assessed under fewer than five of the TPD definitions.

Members who make a TPD claim with an event date from 1 April 2021 onwards will be assessed under the new four TPD definitions. Please note that depending on your employment status at the event date, you may be eligible to be assessed under fewer than four of the TPD definitions. Further details of the eligibility conditions can be found in our updated Insurance Guide available here.

What do you need to do about this change?

There’s nothing you need to do.

The new TPD definition changes will come into effect from 1 April 2021.

NB: Terms that appear in italics in the following tables have special meanings which are explained in full in the Insurance Guide dated 1 April 2021.

TPD definitions - Table E

TPD definitions - Table F

TPD definitions - Table G

Other definitions - Table H

Other definitions - Table I

Other definitions - Table J

Our insurance premiums have remained the same since 1 July 2019. Since this time, a number of major events have occurred impacting insurance held through superannuation:

• The Federal Government introduced two major pieces of legislation that have changed the way all super funds provide and continue offering insurance cover to members. Known as the ‘Protecting Your Super’ (PYS) and ‘Putting Members’ Interests First’ (PMIF) reforms, their introduction has significantly reduced the number of LUCRF Super members with insurance on their accounts as many lost their cover.
• The onset of the COVID-19 pandemic during 2020 affected many Australians (including LUCRF Super members) financially, physically and mentally. The pandemic expects to have wide-reaching impacts on superannuation funds and insurers (and their members) for the foreseeable future.   

The above factors have put pressure on our ability to maintain the current cost of insurance which has unfortunately meant that the premiums for our Death & TPD and Death Only cover must increase. There are no changes to premiums for our Income Protection cover.

No. LUCRF Super is not the only fund that has had to increase their insurance premiums. The impacts of legislative changes and COVID-19 have been felt across all super funds, and this had led to the need for several other funds to also increase the cost of their insurance.

The premiums for our Death & TPD and Death Only cover are increasing by just over 33% from the current rates. This applies to all Fixed Premium and Fixed Amount cover for each occupational category (Light Blue, White Collar and Professional).

For example, for members with default Death & TPD insurance cover:

Cost per week per 2 units of Light Blue Fixed Premium cover (default)1
Current age	Current premiums (to 31 March 2021)	New premiums (from 1 April 2021)
14-24	$1.28	$1.70
25-29	$2.14	$2.83
30-34	$2.98	$3.97
35-64	$3.78	$5.05
65-69 2	$2.55	$3.40

¹ Premium rates are shown net of tax (factoring in a 15% tax rebate on the gross premium rates). Gross premium rates can be found in the updated policy. Premium figures are indicative. The actual premium amounts deducted from your account may be subject to rounding as they are calculated.
² TPD cover is restricted to TPD Definition 3 or 4 once you're 65 and over on the event date (see 'TPD definitions' in Additional Summary above).

Premiums for the following types of cover will increase:

• Death & Total and Permanent Disablement (TPD) - Fixed Premium and Fixed Amount
• Death Only – Fixed Premium and Fixed Amount

There are no changes to insurance premiums for our Income Protection cover.

The last time we increased premiums was 1 July 2019 for our Death & TPD and Death Only cover when we introduced our new insurance benefit design.

If you’re happy with the existing insurance cover you have, you can simply continue to keep it as it is, and the premium rates will change automatically on 1 April 2021.

You may also wish to consider whether the amount of insurance cover you have is right for you. 

• Our online calculator can help you tailor your insurance cover according to your personal requirements – now, and in the future. The calculator may assist you in finding out how much Income Protection, Total and Permanent Disablement (TPD) and Death cover you may need to financially protect you and/or your family. The online calculator is available here.
• You may also wish to seek professional advice through a financial adviser to determine what type of cover and how much is right for you. You can request a callback now.

You can also increase, reduce, convert or cancel the cover you have with us at any time. Find out more here.

We’ve taken the opportunity to review the terms and conditions of our policies. We presently offer a TPD definition known as the ‘activities of daily living’ test (or ADL). To be able to successfully claim on a policy that uses an ADL test, a person must show that they’re unable to do two basic physical activities, such as bathing, dressing, eating, walking or using the bathroom.

ADL TPD definitions have recently come under considerable scrutiny by:

• regulators (such as ASIC), and
• consumer groups (such as Super Consumers Australia and Choice).

ADL TPD definitions are often very restrictive and are applied where members are not employed or are working fewer hours that are required under the policy (e.g. part-time or casual). This can potentially result in members being ineligible for a TPD claim based on their circumstances.

We’ve removed the current ADL TPD definition from our Group Life policy, and updated our TPD definitions, to increase the likelihood that more members will be eligible to claim a TPD benefit.

If you make a TPD claim, you’ll be assessed based on the event date that applies (for example, the date that you ceased working due to injury or illness). Your event date will determine what TPD definitions you’re able to be assessed under.

For an event date that occurs on or before 31 March 2021, you’ll be assessed under a maximum of five TPD definitions to be deemed totally and permanently disabled (needing to meet at least one):

• TPD Definition 1: Unlikely to work
• TPD Definition 2: Permanent impairment
• TPD Definition 3: Activities of daily living
• TPD Definition 4: Permanent loss
• TPD Definition 5: Cognitive loss

For an event date that occurs from 1 April 2021 onwards, you will be assessed under a maximum of four TPD definitions to be deemed totally and permanently disabled (needing to meet at least one):

• TPD Definition 1: Unlikely to work
• TPD Definition 2: Incapable of ever working
• TPD Definition 3: Permanent loss
• TPD Definition 4: Domestic duties