Wednesday, 29 November 2017
- Changes affect Australia’s largest group insurance policy, with over 1,400,000 members insured
- Removes default cover for new members under 18 from 1 December 2017 with new default cover for new members supported by an enhanced life stage design
These changes, effective 1 December 2017 focus on simplifying the insurance product design while also introducing Plain English definitions to help increase member awareness and understanding of the value of insurance as part of superannuation. An enhanced life stage approach also means members’ insurance cover automatically adjusts according to their age.
The changes will see default cover for new members under 18 removed with Death, Total and Permanent Disablement (TPD) cover reduced for new members aged 18-34 years, while long-term Income Protection cover remains unchanged for all members. According to Rest Industry Super Chief Operating Officer Andrew Howard, the changes are the result of significant investment by the fund which were co-created with Rest members and informed by years of experience operating the largest insurance pool in Australia.
“Last financial year we paid over 5,000 claims, which is nearly 20 claims every working day. This gives us a deep insight into the experiences of our 1,400,000 insured members enabling us to design an insurance offering based on their very particular needs,” said Mr Howard.
“As a fund, we have a deep-seated belief in providing insurance cover that isn’t just the regulatory minimum, but insurance cover that meets the unique needs of our members, enabling them to protect their most important asset; their ability to earn future income.
“This has led us to focus on continuing our Income Protection cover which provides members with regular monthly payments up to age 60 if they are unable to work due to sickness or injury, while reducing Death and TPD cover for younger members. We have also increased our focus on member awareness and education of the value of Rest’s insurance offering,” continued Mr Howard.
Despite the increase in insurance claims and corresponding costs, existing members will see no changes to their insurance premiums, with any individual increases in cost met initially by the fund’s insurance premium rebate.
A significant aspect of the redesign is creating greater certainty of cover by removing complex rules in Rest’s insurance policies, while at the same time ensuring our insurance offering meets the needs of our members, including maintaining the current level of Income Protection.
“We’ve removed some employment-related requirements that were previously necessary so that members can rest easy knowing that as long as they’re making superannuation contributions, or can pay their premiums, they’re covered,” said Mr Howard.
“Our insurance pool covers one in ten working Australians, and pays out over 90c of every dollar paid in premiums. These changes make sure that our 1,400,000 insured members are protecting their most valuable asset – their ability to earn an income.
“We’re also committed to making it easy for our members to understand the value of the insurance they hold as part of their super. We have made significant investments in technology, including our new mobile App that makes it easier for members to check and change as well as opt-out of their insurance as part of their super,” concluded Mr Howard.
-ENDS-
For further information, please contact:
| Shane Allison Sefiani Communications sallison@sefiani.com.au t: (02) 8920 0700 m: 0420 219 963 |
Pauline Hayes Corporate Communications Manager Pauline.Hayes@rest.com.au t: (02) 9086 6348 m: 0458 815 252 |
About Rest Industry Super
Rest is one of Australia’s largest super funds by membership with over $45 billion in funds under management as at 30 June 2017 and around 2 million members. Rest was awarded Best Fund Innovation 2017 at the Chant West 2017 Super Funds Awards and also 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 rest.com.au/ourawards For further information about the methodology used by Chant West, see www.chantwest.com.au
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 www.rest.com.au 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).
About Rest’s insurance
Rest operates the largest insurance pool in Australia
- Rest provides almost 1.4 million working Australians (around 70% of Rest Super members) with insurance as an important part of their superannuation.
- Total insurance cover provided to Rest members comprises $286 billion in Death sums insured, $70 billion for Total and Permanent Disablement (TPD) and $2.15 billion in Income Protection (IP) benefits to November 2016.
Rest works to ensure the maximum number of members receive appropriate insurance cover
- In the twelve months to 30 June 2017 Rest paid over 5,100 insurance claims, many to members who would otherwise not have access to flexible and affordable insurance cover because of their employment status or low discretionary income.
- The average age of a Rest member who made an insurance claim is between 41 and 50.
Rest is covering the cost of increased premiums
- Despite the increase in insurance claims and corresponding costs, existing members will see no changes to their insurance cover, with any individual increases in cost initially met by the fund’s insurance premium rebate.
- New members who join Rest Super after 1 December 2017, will pay up to 25% less for their default insurance while maintaining their long-term Income Protection cover. Existing members will have no changes to their insurance cover.
Rest is removing default insurance cover for new members under 18
- From 1 December 2017, default cover for new members under 18 is removed with Death and TPD cover reduced for new members aged 18-34 years.
Rest has enhanced its life stage design
- Starting next year, a Rest member’s insurance may automatically adjust once a year, on their birthday. The cost of cover may also change. For younger members Rest offers a modest amount of Death and TPD cover. Default cover increases with age when financial commitments are usually higher and there is a greater dependency on income.
Rest is working to keep insurance simple
- Rest is one of the first Australian superannuation funds to use Plain English in policy definitions, policy documents and in insurance guides and Product Disclosure Statements.
Rest is keeping insurance cover for new members if they stop working
- From 1 December 2017, TPD and IP will continue after Rest Super members change jobs or stop working, no matter what their account balance, provided they still have funds available in their Rest Super account.
Rest is increasing Income Protection claim payments in line with inflation
- From 1 December 2017 Rest will increase IP payments by the Consumer Price Index if members are eligible for claims resulting from an injury or illness that occurs on or after 1 December 2017. Previously IP claim payments increased by an index called Average Weekly Ordinary Time Earnings.
Rest is making it easier to claim the full Terminal Illness Payment
- From 1 December if a member becomes Terminally Ill, Rest will pay their Death insurance benefits in full, if eligible.
- Previously if a member became Terminally Ill Rest paid the lesser of a Member’s Death and TPD insurance benefits, if eligible.
Rest is investing in technology to help make it easier for members to manage their insurance
- All members who join Rest are able to access information on their insurance cover via the Rest App. Members can also increase, decrease or opt-out of their insurance online, via the mobile app or over the phone.