Retirement
Does your TPD insurance cover COVID-19?
Superannuation members with total and permanent disability insurance (TPD) are being urged to check their policy following a new announcement from an insurer that they won’t cover COVID-19.
Does your TPD insurance cover COVID-19?
Superannuation members with total and permanent disability insurance (TPD) are being urged to check their policy following a new announcement from an insurer that they won’t cover COVID-19.
Super Consumers Australia found that people may be denied pandemic-related death, total and permanent disability or income protection cover if they recently opened an account or changed their level of cover across various funds.
Super Consumers Australia director Xavier O’Halloran explained most people are defaulted into this insurance cover as part of their superannuation. The funds identified include industry funds for frontline emergency workers and key distribution workers, like truck drivers.
“It is particularly upsetting that the people on the frontline of getting us through this challenge could be left without adequate insurance cover. These funds need to ask themselves if they’ve done the right thing by people in their hour of need,” Mr O’Halloran said.
“We are calling on all super funds and insurers to do the right thing and remove these unfair terms.”
The financial services royal commission recommended the federal government consider establishing universal terms for insurance in super. The recommendation was designed to put an end to fine-print exclusions that were out of step with community expectations, like pandemic exclusions.
“There has been a steady hollowing out of insurance, which means it is no longer meeting the needs of the community. It’s time to follow the royal commission recommendation and build an insurance scheme that is fit for purpose,” Mr O’Halloran said.
HESTA, Colonial First State FirstChoice and Care Super also have pandemic exclusions, but all have vowed not to rely on them given the current challenges facing the community.
How the pandemic exclusions apply in each of the funds
- TWU Super – pandemic exclusion for death insurance policies for members who have taken out additional cover, or are in the first 30 days of commencing or recommencing cover. Activated where the fund’s insurer has given 14 days’ notice prior to death.
- UniSuper – pandemic exclusion for income protection insurance in a member’s first 30 days of cover, where the fund’s insurer has given 14 days’ notice.
- NGS Super – pandemic exclusion for death insurance policies for members who have taken out additional cover, or are in the first 30 days of commencing or recommencing cover.
- Prime Super – pandemic exclusions for death insurance where the fund’s insurer has given 14 days’ notice.
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