Sunsuper has saved the equivalent of $36 million per year through a reduction in its premiums thanks to a redesign of its total and permanent disability (TPD) insurance.
The adoption of the redesigned product, called TPD Assist, resulted in a 30 per cent reduction in premium fees compared to the previous TPD offering. Overall, this meant the cost of insurance for a member fell by 15 per cent once other products, such as life insurance, were factored in.
“The good thing is we didn’t have to reduce cover. Sunsuper is very much [of] the belief that cover is key, but it was critical that we didn’t have that cover eroded retirement savings,” Keristi Price, manager of insurance products at Sunsuper, told delegates at the Group Insurance Summit.
“It is very important focus for our members, especially as only 0.5 per cent of them actually claim.”
Last year, Sunsuper announced its research had found 36 per cent of its members who had claimed TPD insurance were back at work or actively seeking it within three years.
It also found a significant portion of claimants wanted assistance with vocational rehabilitation, retraining or upskilling.
TPD Assist removes the waiting period for the employed part of the definition to encourage early intervention and return to work.
“It is counterintuitive for us to have a three-month waiting period when trying to encourage people to go back to work,” Price said.
The majority of claimants have their payments are split into six and paid over five years.
“There will be annual assessment to ensure [claimants] are still total and permanently disabled,” Price said. “It was also critical to ensure that [lump sum] TPD was still available for those people who had experienced catastrophic events or long-term term debilitating diseases.”
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