Industry super fund Cbus has signed a new insurance deal with TAL that will see premiums decrease substantially.
Premiums per unit of death and TPD cover for most members will go down by 25%, while for 15 to 44-year-old manual labour members; cover per unit of TPD will be increased.
Speaking at the fund's annual member briefing in Melbourne, Cbus chief executive David Atkin said reducing insurance premiums would ultimately boost the retirement savings of members.
"Cbus is delivering insurance that meets our members' needs on a cost, coverage and accessibility basis," Atkin said.
"Our members work in some of the toughest conditions of any industry which is why being able to access affordable insurance through superannuation is important to them."
Atkin added that the decision to reduce default cover for younger members was in response to the reality that young people are less likely to have dependents or mortgages and that more super savings earlier is critical over the long term for retirement balances.
"Recognising the need to maximise their super savings early, we have moved to reduce their default insurance costs from $7.16 per week to $2.68," Atkin said.
"These changes recognise the different needs of our members at different stages in their lives with a focus on ensuring they've got the cover they need while maximising their retirement outcomes."
- Death + TPD: premium rate reduction of 25% ($3.58 to $2.68 per week cost per unit for Death and TPD cover) - this includes 40% reduction to TPD for manual members and 44% to TPD for non-manual and Professional members
- Income protection: premiums for income protection accident only cover for sole traders down by 44%
- TPD (aged 15-44): cover per unit of TPD increasing between 20%-100% for industry manual members between age 15 and 44
- TPD (aged 15-20):
- One unit of TPD cover will double from the current $26,000 to $52,000.
- New default cover of 1 unit death and 1 unit TPD - death cover reduced to $52,000, TPD remains at $52,000, default cover cost reduction from $7.16 to $2.68 per week
Changes will be effective for members from 30 September 2017.