Removal of life insurance for under 25’s may have unintended consequences for young Australians

Thursday, 10 May 2018

The removal of life insurance for those aged under 25 proposed by the Government in this year’s Federal Budget may have unintended consequences for younger working Australians with superannuation, according to Rest.
As a leading industry super fund Rest provides 1.4 million working Australians with insurance and has around 32% of members with insurance under the age of 25.
Rest Interim Chief Executive Officer, Andrew Howard believes many younger Australians, benefit from affordable and flexible life insurance as an important part of their superannuation.
“Many young people have children, mortgages, health and educational expenses that will not go away if they find themselves unable to continue to provide for their family,” he said.
In the last two years Rest paid $36.5 million dollars in Death claims, $9.2 million in Income Protection and $2.75 million in TPD payments to those under the age of 25.
“For young people their most important asset is their ability to earn a living and insurance as part of superannuation provides an important means of helping them and their families receive valuable financial assistance in times of need, stated Mr Howard.
“Without insurance provided as part of superannuation many Rest members would otherwise not have access to insurance cover because of their employment status or low discretionary income.
It is also important to acknowledge the diversity of the Australian population and in particular fund members who may be disadvantaged unless their superannuation fund has some discretion to offer the most appropriate insurance to meet their particular needs.
“Once the insurance cover is removed, opting into insurance cover makes it more difficult for those with pre-existing conditions including mental health, to access affordable cover.  They will need to provide medical evidence and may also need to see a doctor before being assessed by the insurer. This may result in higher premiums or subject to other conditions.” 
Rest also recognises the importance of ensuring balances are preserved if people aren’t contributing to their superannuation.
“We welcome proposals which seek to preserve balances if people are no longer contributing for a period of 13 months.
“Sixty-two per cent of Rest members are female, many of whom work in part time and casual employment.  We strongly encourage the Government to consider the needs of women and in particular contingent and flexible workers who may wish to retain this cover past 13 months.
“Provisions should be made for part-time and casual workers, as well as those on career breaks, to retain their insurance cover as part of their superannuation.”
Rest recently announced a refreshed insurance design which removes insurance cover for under 18’s and reduced the cost in cover for those under the age of 35.


For further information, please contact:
Shane Allison
Sefiani Communications
t: (02) 8920 0700 m: 0420 219 963
Pauline Hayes
Corporate Communications Manager
t: (02) 9086 6348 m: 0458 815 252

About Rest

Rest is one of Australia’s largest super funds by membership with $50 billion in funds under management as at 31 December 2017 and around 2 million members. Rest was awarded Best Fund Innovation 2017 at the Chant West 2017 Super Funds Awards and also recently won the Rainmaker SelectingSuper Innovation Award 2017 for Millennial Superannuation*.
*Ratings or awards are only one factor that you should consider when deciding how to invest your super. For more information about our awards, visit  For further information about the methodology used by Chant West, see
This information doesn’t take into account your circumstances. So, before acting on it, you should consider whether it is appropriate for you.  Before making a decision about your super, please read the relevant Product Disclosure Statement (PDS) available at or call 1300 300 778.  This information is provided by the issuer, Retail Employees Superannuation Pty Limited, ABN 39 001 987 739 as trustee of REST (Retail Employees Superannuation Trust ABN 62 653 671 394).