An $8.5 billion industry superannuation fund is increasing the cost of insurance premiums paid by members.
Australian Catholic Superannuation and Retirement Fund is upping the cost of its death and total and permanent disablement unitised cover as it tries to manage the tension between more claims and less insured members of the fund.
This week ACSRF told members that in order to continue offering a sustainable and equitable insurance option to members it would need to increase the cost of the cover offered to members, owing to an increase in paid claims. The fund's insurer is OnePath Life.
"Over the past few years, we have received an increase in insurance claims and as a result we need to ensure we can continue to cover the cost of these claims," ACSRF told members.
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"Our primary goal is to ensure a sustainable and equitable insurance option for members of the fund, and this has resulted in a pricing change.
"Additionally, we have seen a reduction in the amount of members who have insurance due to the government's Protecting Your Super and Putting Members' Interests First laws. This has also impacted insurance costs."
From August 1 the annual cost for one unit of combined death/TPD cover will be $75.09. For death only, members will pay $43.28 per unit each year.
According to the fund's most current insurance fact sheet, the weekly cost of one unit of combined cover is $1.29, whereas death only cover is $0.74. Taken on an annual basis, members currently pay $67.08 a year for combined cover and $38.48 for death only cover.
The fund also adjusted the cost of age dependent death and TPD fixed cover.
For somebody turning 45 at their next birthday, the cost of death and TPD cover per $1000 insured will be $1.19. Death only cover will cost $0.69. Currently, the same member would be charged $1.06 for combined cover and 0.62 for death only cover.
Income protection cover is also more expensive, with a member turning 45 at their next birthday charged, $131.78 for a 30 day waiting period, $71.69 for a 60 day waiting period and $44.94 for a 90 day waiting period on a two year benefit policy per $15,000 unit. Currently, those costs stand at $99.50, $54.13, and $33.93 respectively.
"Our primary goal is to provide our members the best cover possible," ACSRF said.
"We do not make a profit from insurance and all premiums paid by members are on forwarded to the fund's insurer."