Members of a $25 billion industry superannuation fund are set to pay higher insurance premiums from April 1, with some paying up to 20% more for death and TPD.
VicSuper has notified members their insurance premiums are increasing as a result of the Protecting Your Super and Putting Members' Interests First reforms. Improvements to its policy and the number of claims paid out are also factors, the fund said.
From April 1, the cost of death and TPD for those members in the general occupation category will increase from $0.97 per unit of cover each week to $1.17. The cost of death only cover remains the same at $0.34.
Those categorised as white collar will go from paying $0.78 per unit each week to $0.94, while the cost of death only will rise marginally from $0.27 to $0.28.
Professionals currently paying $0.55 per unit a week for death and TPD will soon pay $0.66 and $0.20 for death only - up from $0.19.
Those in the own occupation category will see their weekly per unit cost rise from $1.07 to $1.31 for death and TPD. Death only remains the same at $0.34.
Despite the changes to cost, the amount of cover remains the same throughout, VicSuper said.
The cost of income protection is also going up, with increases between 19.83% and 20.13% depending on the member's age, occupation category and level of cover chosen.
Same goes for fixed cover, with premiums for death and TPD increasing between 10.5% and 23.8%. Death only premiums under fixed cover will rise by 2%.
"The new legislation will reduce the number of members who will have automatic default cover. This means there'll be fewer insured members to share the cost of cover, ultimately increasing the cost of cover," VicSuper said.
"We always work with our group life insurer to negotiate bulk insurance rates for our members. Because we're a profit-to-member fund, we don't pay profits or dividends to shareholders. This means you only pay for what it costs us to provide you with insurance."
VicSuper's group insurance is provided by MetLife.
In terms of improvements to cover, from April 1 members with income protection cover will be eligible for benefit even if they are working less than 14 hours, provided their date of disablement is on or after 1 April 2020 and they meet other eligibility criteria.
This will also apply to those who are not working when their disablement occurs but have a formalised agreement to commence employment in the future.
Further, from April 1, super contribution benefits received as part of an IP disability benefit will no longer cease if the member becomes unemployed.
VicSuper has also increased the time allowed to apply for life events cover from two to six months.