
Changes to insurance
From 1 April 2021, we'll be making changes to our insurance cover.
From 1 April 2021, we’ll be making changes to our insurance cover, including:
- increasing premiums for Death & Total and Permanent Disablement (TPD) and Death Only cover, and
- changing the TPD definitions, including the removal of the ‘activities of daily living’ (ADL) test.
Why are insurance premiums changing?
Recent events, including legislative changes by the Federal Government, and the health and economic impacts of the COVID-19 pandemic, have increased the cost of providing insurance cover to members through their super.
In response to these events, and after an extensive review with our insurer, OnePath Life Limited, the premiums for Death & TPD and Death Only cover will increase for the first time since 1 July 2019.
Why are TPD definitions changing?
We’ve reviewed the TPD definitions so that more members can access benefits under this policy.
By removing the ‘activities of daily living’ test, members will no longer have to demonstrate that they can’t do basic physical activities, such as bathing or dressing, in order to make a claim.
What do you need to do?
Nothing at all. If you currently have Death & TPD or Death Only cover, the insurance premiums we deduct from your account will automatically increase, and the TPD definition changes will come into effect from 1 April 2021.
Part 1: Insurance premiums for Death & TPD and Death Only cover
Summary of changes
Date of this notice
15 Feburary 2021Purpose 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 2021How 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.
Part 2: Updated, added and removed definitions
Summary of changes
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.
Additional information
TPD definitions - Table E
TPD definitions - Table F
TPD definitions - Table G
Other definitions - Table H
Other definitions - Table I
Other definitions - Table J
Frequently Asked Questions (FAQs)
Can you give more details on why the insurance premiums are changing?
- 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.
Are insurance premium increases something that is only happening to LUCRF Super members?
How much are premiums going up by?
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).
Are all insurance premiums changing?
- Death & Total and Permanent Disablement (TPD) - Fixed Premium and Fixed Amount
- Death Only – Fixed Premium and Fixed Amount
When was the last time premiums increased?
What options do I have with my insurance?
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.
Can you give more details on why the TPD definitions are changing?
ADL TPD definitions have recently come under considerable scrutiny by:
- regulators (such as ASIC), and
- consumer groups (such as Super Consumers Australia and Choice).
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.
What will it mean for me if I make a TPD claim?
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
- TPD Definition 1: Unlikely to work
- TPD Definition 2: Incapable of ever working
- TPD Definition 3: Permanent loss
- TPD Definition 4: Domestic duties
If you're unhappy with these changes, you can lodge a complaint here.
