Hi. Signing up to a super is a good moment to get good rates for TPD, Death, Income protection insurance. I had some medical history and I would probably not get life insurance on the market. Which super would ask minimum questions for new customers or come with some default insurance automatically enabled for all members? thanks
Insurance in a new super - which one asks minimum questions (illness history)
Lcesanneo2 on 14/06/2022 - 13:40
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Yes, it would probably be better to get the questions asked now, rather than try and claim and have your claim denied due to non-disclosure or some fine print or legal loophole.
…except if you get cover under an AAL. Pre-existing conditions are covered.
What you're after would be an AAL - Automatic Acceptance Limit.
Depending on where you work and your industry, the amount could be high or low. It is when you join a new company that has a default super fund with insurance under a 'group' policy. If you join at the first opportunity, you're automatically covered for an amount up to that AAL without any questions asked (this includes pre-existing medical conditions). If you require more cover, then you'll need to answer questions and possibly provide a personal statement or attend a medical (depending on the amount you want).
awesome. thanks. AAL seems like the proper name for the 'default' i was asking about. So instead of joining i will let the company to sign me up and ask if they have 'group' policy. Or all companies above certain size have? Do you know the details? thanks
Employers generally have an agreement with the life insurer to setup new employees with a certain amount of insurance upon joining the fund. The amount will generally (but not always) depend on employees' salaries or a set amount, up to the AAL. The AAL generally depends on how big the company is, which industry, etc. For example, the AAL would be higher for a company who's employees work in the office vs those in the blue collar industry.
For example, the employer might choose a calculation that is 5 times annual salary, with an AAL of $500K. So if you join the employer and then the fund and your salary is $50K, then your insured amount will become $250K. (Note that you do not automatically get $500K of insurance). If your salary is $120K, then your insured amount will automatically and initially be limited to $500K, and then once you successfully complete the documentation from the insurer, then you will get the full 5 x $120K = $600K.
" Signing up to a super is a good moment to get good rates for TPD, Death, Income protection insurance".
Use to be a cheap way to get insurance. Not anymore.
Insurance via default cover under a general industry fund is expensive now compared to applying for a separate insurance policy (with the possibility of getting it funded by your other super fund). If an superfund/insurance company has to accept everyone including high risk, then they bump up the premiums for everyone.
Omitting information on life insurance is a great way to rekt one's fam after death.
Not necessarily.
If they provide you a high level of default cover, or provide automatic acceptance without underwriting, then they don't have a leg to stand on to reject your claim.
If they ask you medical questions which you lie or omit relevant information, then that's a different story.
Thanks. You got the question right. It is about 'default' cover to all new customers that you have to 'turn off' if you do not want it.
fair point, but that never was the intention. Seems I was asking about AAL, I just did not know the name for it.
Is there any option if you want to be covered for pre-existing illnesses other than AAL ?
It depends on what your pre-existing condition is.
In a lot of cases, they are willing to add a premium loading factor (ie, a multiplier for the premium), but where they deem the risk too high, it's simply better to just decline cover (either for the entire policy as a whole or provide cover with an exclusion for that particular condition).AAL will be fine. Thanks
Even if you can find a company that asks no medical questions at all, you'll still find that you won’t be covered for any pre-existing illnesses or injuries you had before you got your
insurance.