A $45 billion industry superannuation fund has undergone an insurance overhaul to bring its offering in line with major competitive shifts in the super system.
Among the changes at REST Industry Super, new members will pay up to 25% less for default life insurance and will be able to maintain valuable long-term income protection cover.
From 1 December 2017, new REST members under 18-years-old will also see default life insurance cover removed but it will be supported by an enhanced life stage insurance offering that can adjust cover according to age.
REST said the move simplified its 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."
The industry fund added that death and total and permanent disablement (TPD) cover is now also reduced for new members aged 18 to 34 years, while long-term income protection cover remains unchanged for all members.
REST Industry Super chief operating officer Andrew Howard said the changes are the result of significant investment by the fund, co-created with REST members and informed by years of experience operating the largest insurance pool in Australia.
"Last financial year we paid over 5000 claims, which is nearly 20 claims every working day. This gives us a deep insight into the experiences of our 1.4 million insured members enabling us to design an insurance offering based on their very particular needs," Howard said.
"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."
He added this led REST to focus on continuing its 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.
REST said despite an increase in insurance claims and corresponding costs, the super fund's existing members will see no changes to insurance premiums, with any individual increases in cost met initially by the fund's insurance premium rebate.
The super fund has also removed complex rules in its insurance policies.
"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," Howard said.
"Our insurance pool covers one in 10 working Australians, and pays out over 90 cents of every dollar paid in premiums. These changes make sure that our 1.4 million insured members are protecting their most valuable asset - their ability to earn an income.
"We have [also] 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."