An industry superannuation fund has secured an insurance premium freeze for its low-risk members while other funds' premiums rise.
Legalsuper, which has 40% of Australia’s legal profession as its members, has negotiated a three-year freeze with its existing insurer OnePath.
The industry super fund’s CEO Andrew Proebstl told Wealth Professional
the fund hired a consultant – Colin Cassidy of Super Benefits Administration – to negotiate the freeze.
“The consultant reviewed the existing arrangements we had in place with the insurer, and built a strong case with the insurer outlining our favourable claims history… It was a constructive discussion with the insurers.”
This favourable claims history is due to the fund’s low-risk legal profession membership.
Proebstl said the fund would not have been able to negotiate the insurance benefits should it cater to multiple occupations.
The insurance enhancements will be launched to members in Legalsuper’s February mid-year report to members.
The insurance freeze is in contrast to what other funds have experienced over the last six months, which is a rapid rise in premiums for members. HOSTPLUS raised premiums by 85% in December and Australian Super by 38% last June.
The reasons for this premium rise vary from fund to fund, Proebstl said.
“It probably depends on the fund, but the two key factors are deterioration in claims history and that members are becoming more aware of the fact they have insurance arrangements in place with their superannuation, so there are more insurance claims.”
· Unlimited death cover (previously $3M)
· Increased TPD cover to $3M (from $2M)
· Increased terminal illness benefit to $2M (from $1M)
· Increased maximum income protection to $25,000 (from $20,000)
Legalsuper was established in 1989 by the legal profession, and now manages $2.2 billion for 41,000 members.
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