Ahead of its proposed merger with Cbus, Media Super has announced an increase in insurance premiums for default and non-default income protection.
The premiums will increase from 1 December 2020 and will apply to members who receive automatic default income protection cover and any members who apply for the cover from the date it changes.
Media Super's standard default cover is calculated based on age at next birthday, with a default number of units allocated to each age.
For members aged between 26 and 30, cover will increase from $8.88 to $14.39 per week, for those aged 41-45 cover will increase from $12.22 to $19.79 per week.
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Members aged 51-55 will have their cover increased from 14.44 to $23.39 per week and those aged 61-70, cover will increase from $16.66 to $26.99 per week.
Non-default cover with a five- year benefit period for members who have selected a specific number of units and or a different waiting period will have their premium calculated using the waiting period multiplied by the units.
The current cost per week for a 30 day waiting period is $1.1105 and will increase to $1.799, a 60 waiting period will increase to $1.209 from $0.7461 and 90 days will cost $1.049 from $0.6474.
For example a member wanting $8000 of cover per month with a 60 day waiting period will require 16 units of cover therefore costing $19.34 per week.
For members with non-default cover with benefit period to age 65, the premiums are based on age, gender, occupation and waiting period.
For a 40 year old male with a 30-day waiting period, the new cost is $30.91 per unit of cover, from $19.08, while a 60-day waiting period will increase from $13.88 to $22.49 and a 90-day waiting period will increase from $7.99 to $12.94.
A 40 year old female with a 30-day waiting period will pay a staggering $55.40 per unit from $34.20, $42.57 from $26.28 for a 60-day waiting period and $27.43 from $16.93 for a 90-day waiting period.
Media Super attributes the rise in premiums to the recent changes in legislation, Protecting Your Super and Putting Members' Interests First, which has triggered an exodus members holding insurance within superannuation.
"As a result, Media Super, like many super funds, will pass on the increased insurance premiums to members. All premiums payable to Media Super's insurer are deducted from the accounts of insured members," it said in a note to members.
The $6 billion fund said it regularly reviews its insurance offering to make sure it is cost effective.
"Our next review of insurance arrangements - including the level of insured benefits, premiums, and terms and conditions - for death, TPD and income protection cover will be undertaken ahead of the new financial year and is expected to be effective from 1 July 2021," Media Super said.