INSURANCE HANDBOOK PEACE OF MIND FOR VICSUPER FUTURESAVER MEMBERS AND THEIR FAMILIES
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Insurance
handbook
Peace of mind for
VicSuper FutureSaver members
and their families
1 January 2015
Contents
Insurance handbook
Contents
Section Page
Need help with the 1 Introduction 3
calculations? Why have insurance cover? 3
Your choice of cover 4
Take advantage of our online Insurance health check – things to 5
insurance calculators to work out consider
your premium and level of cover. 2 Automatic cover and changing your 6
Visit vicsuper.com.au/calculators cover
Cover when you join the fund 6
Making changes to cover 7
3 Death and TPD cover 10
4 General information about death 14
and TPD cover
5 Income protection cover 18
6 General information about income 21
protection cover
7 Own approved occupation – TPD 25
cover (EmployeeSaver members only)
8 Glossary 27
9 Approved occupation table 28
10 VicSuper privacy information 29
Form 31
Insurance cover described in this handbook is provided under group life insurance and group salary continuance policies issued and underwritten by the National Mutual Life Association of
Australasia Limited trading as AMP (the Insurer) ABN 72 004 020 437. Australian Financial Services Licence No. 234 649. This handbook is intended to be a guide to the insurance cover
available through VicSuper under the policies, however, all cover is subject to the precise terms and conditions of those policies. Examples provided are for illustration purposes only. Your
personal circumstances are likely to be different and more complex than the examples used.
2
Introduction | Section 1
Insurance handbook
Why have insurance cover?
We think nothing of insuring our cars. They’re expensive to replace, and we
accept that there’s a chance they could be involved in an accident.
Yet the majority of us don’t consider the possibility of something happening to us.
Unfortunately, the risks are every bit as real, but we often don’t want to confront them.
An injury or illness could have a devastating effect on your finances and the likelihood may
be greater than you have considered.
If you died or became permanently or temporarily disabled tomorrow, would your family be
able to cope financially?
• how would you pay the mortgage or rent?
• could you pay for your children’s education?
• would your business survive?
• who would pay for the costs of ongoing care?
Just like car insurance or house and contents insurance, you take out death and total and
permanent disablement cover or income protection cover in the hope that you’ll never need
to claim on it. But isn’t it better to know that you have a safety net there if you need it?
VicSuper’s insurance is provided under group policies making premiums competitive with
those you could get as an individual. The best part of having insurance through your super, is
that premiums are deducted from your superannuation account, not your take home pay.
Cover is provided 24 hours a day, 7 days a week, all around the world.
Important information
Different insurance arrangements apply depending on the type of account you hold as a
member of VicSuper FutureSaver. If you joined VicSuper through a VicSuper participating
employer, you are an EmployeeSaver member. If you joined VicSuper as an individual,
you are a PersonalSaver member. This Insurance handbook outlines the insurance
arrangements that apply to these two types of memberships.
3
Section 1 | Introduction
Insurance handbook
Your choice of cover
VicSuper provides members with Occupation categories Need help with the calculations?
three types of insurance cover. Take advantage of our online
Depending on the type of insurance cover,
Death only cover - Death only cover is there are three occupation categories that insurance calculators to work out your
designed to assist your family with financial may apply: general occupation, approved premium and level of cover.
security if you die. If your circumstances suit occupation and own approved occupation. Visit vicsuper.com.au/calculators
death only cover and you’d like to take up
General occupation: if your gross annual
this option, you can choose between
salary (ie before tax and excluding
unit-based and fixed death only cover (see
employer superannuation guarantee
page 10 for more details).
contributions) is less than $75,000 or your
Death and TPD (Total and Permanent occupation is not listed on page 28, general
Disablement) cover - Death and TPD occupation rates will apply. EmployeeSaver
cover is designed to assist you and your members are provided with the general
family with financial security if you die or occupation category with their automatic
become permanently disabled. A TPD income protection cover.
benefit provides you with a lump sum
Approved occupation: if your gross annual
benefit if you are unable to work for health
salary (ie before tax and excluding
reasons and medical evidence indicates it is
employer superannuation guarantee
unlikely that you’ll ever work again. You can
contributions) is $75,000 or more and you
choose between unit-based cover and fixed
work in one of the occupations listed on
cover (see page 10 for more details).
page 28, you may apply for the approved
Income protection - Income protection occupation category.
cover provides you with replacement
Own approved occupation: if you meet
income if injury or illness impacts on your
the approved occupation criteria above, and
earning capacity, causing you either total or
you choose a benefit period of five years or
partial disability. Income protection
to age 65 in respect of your income
payments are paid monthly for your chosen
protection cover, you may choose to pay a
benefit period of up to two years, 5 years or
higher premium to be covered for your own
to age 65. Waiting periods apply. See page
approved occupation.
18 for more details.
4Introduction | Section 1
Insurance handbook
Insurance health check – things to consider
Step 1: Step 3: Need some advice?
Review your insurance Apply for, or change your cover VicSuper’s advice team are here to help you
arrangements You can use the Insurance request form work out the type and level of cover to best
• do you currently have death, TPD attached to the back of this handbook or go suit your needs. A VicSuper express advice
and/or income protection cover? to vicsuper.com.au/insurance to apply for team member can contact you via phone to
• should you have any of these types insurance, or increase, decrease, or transfer discuss your situation. Contact the Member
of insurance? your existing cover, or cancel any existing Centre on 1300 366 216 to make a booking.
• how much cover do you need? cover you have.
Duty of disclosure
VicSuper EmployeeSaver members can take
You have a legal responsibility to disclose
Step 2: advantage of the special insurance offer
any information that may affect the
Consider your options period to increase their cover with minimal
assessment of your insurance application to
• unit-based death and TPD cover or underwriting requirements. See page 7
VicSuper and the Insurer. If you fail to
death only cover for details.
comply with your duty of disclosure and the
• fixed death and TPD cover or death Insurer would not have entered into the
only cover Step 4: contract on any terms if the failure had not
• income protection cover. Reassess from time to time occurred, the Insurer may avoid the contract
The level and type of cover you need will within three years of entering into it. If your
depend on your personal circumstances non disclosure is fraudulent, the Insurer
and financial commitments. Do you have a may avoid the contract at any time. An
family? Have you purchased a new house? Insurer who is entitled to avoid a contract of
As your needs and circumstances change, life insurance may, within three years of
you should review your insurance entering into it, select not to avoid it but to
arrangements regularly to ensure that they reduce the sum that you have been insured
continue to match your needs. for in accordance with a formula that takes
into account the premium that would be
payable if you had disclosed all relevant
matters to the insurer.
5Section 2 | Automatic cover and changing your cover
Insurance handbook
Cover when you join the fund
EmployeeSaver members Limited cover PersonalSaver members
– default cover Limited cover of one unit of death and TPD You do not receive insurance cover when
cover (and no income protection) applies if you join VicSuper as a PersonalSaver
Eligible new VicSuper EmployeeSaver
you meet the conditions listed in a), b) and member. You can, however, apply for the
members under age 65 automatically
c) in the first column, but one or more of type of cover that best suits your
receive default cover, subject to the
the following apply to you: circumstances. See page 8 for more details.
conditions outlined in the insurance policy.
• you have previously been paid or are
Default cover provides you with six units of
entitled to be paid a TPD benefit or
unit-based death and TPD cover and six
terminal illness benefit from VicSuper’s
Cover start date
units of income protection cover ($3,000
Insurer, another fund or insurance policy; EmployeeSaver
per month) with a 90 day waiting period
or Cover starts for new EmployeeSaver
and two year benefit period, provided:
• you have joined the fund whilst in receipt members who are eligible for default cover
a) VicSuper receives at least one
of worker’s compensation benefits, from the later of:
superannuation guarantee (SG)
statutory accident compensation scheme • the date you commenced employment
contribution for you from your
payments or any other disability income with your VicSuper participating
participating employer; and
benefit; or employer, and
b) you become a member before the later of:
• you have: • the earliest date in the pay period
– six months from the date you most
– elected to join VicSuper after initially covered by the first SG contribution
recently commenced employment with
not joining VicSuper under choice of received for you from your VicSuper
your participating employer; or
fund legislation when you were still participating employer.
– six months from the date you first
working for the same participating
became eligible to receive SG Where cover is subject to underwriting
employer; or
contributions from your participating requirements, cover will commence from
– re-joined VicSuper after previously
employer; or the date cover is accepted by the Insurer.
exiting the fund under choice of fund
– (if applicable) three months from the Some members may be subject to limited
legislation when you were still working
date your participating employer first cover as noted on this page.
for the same participating employer.
nominated VicSuper as the default
fund for their SG contributions; and Limited cover means you are only covered PersonalSaver
c) for TPD cover, you are “at work” from the for illness that first becomes apparent, or an PersonalSaver members do not receive
date your cover commences (that is, not injury that first occurs, after the date limited automatic insurance cover, and any cover
on leave due to illness or injury). cover commences. You can only apply for applied for is subject to underwriting
additional cover by being fully underwritten requirements. If approved by the Insurer,
Members aged 65 to 69 when they join by the Insurer. cover will commence on the date the
VicSuper EmployeeSaver will receive six
If you are unsure whether you currently Insurer provides written notification of
units of death only cover, provided they
have insurance cover, please contact one of acceptance of your application, provided
satisfy the conditions listed under a) and b)
our experienced superannuation consultants there are sufficient funds in your account at
above. That is, TPD and income protection
on 1300 366 216, who will be happy to that time to pay for the premiums. If you do
cover is not provided to new members
assist you. Alternatively, you can login to not have any funds in your account at the
aged 65 or more.
VicSuper MembersOnline to check your time of acceptance, you will not be covered
If you do not meet the conditions listed insurance cover at any time – simply visit until such time as we receive sufficient
above, default cover does not apply. To our website at vicsuper.com.au to login. funds in your account.
obtain cover you will need to complete the
Insurance request form or alternatively
complete the Insurance application form
online at vicsuper.com.au/insurance
(refer to page 8 for details).
Even if you meet the conditions listed above,
some members may be subject to limited
cover of only one unit of death and TPD
cover (and no income protection cover).
6Automatic cover and changing your cover | Section 2
Insurance handbook
Making changes to cover
There is a range of different options for insurance cover through VicSuper; this allows you to tailor your cover to meet your individual circumstances.
Your options are outlined below:
Cover type Premiums
• Unit based cover for death and TPD $1.07 per unit per week
• Unit based cover for death only $0.39 per unit per week
• Fixed cover for death and TPD Fixed cover premiums vary depending on your age. The annual premiums per $1,000 sum insured
per occupation category are listed in Table 2 on page 13
• Fixed cover for death only
• Income protection Income protection premiums vary depending on your age, occupation category, waiting period and
benefit period. The cost per unit per week is listed in Table 3 on page 20. Each unit of cover is
worth $500 sum insured per month.
For death only or death and TPD cover, you Your options within the special insurance Simply complete the attached Insurance
can choose either unit-based or fixed cover, offer period are - request form and return it to VicSuper before
but you cannot have a combination of both. • Unit-based cover: you can increase your your special insurance offer period ends or
You can also have income protection cover death and TPD cover to a total of eight alternatively you can cancel your insurance
in addition to your unit-based or fixed cover, units (including your default cover) if you online at vicsuper.com.au/insurance
or by itself. complete (and meet all the conditions You can transfer your unit-based cover to
in) a Good Health Declaration. fixed cover at any time, if you complete
Special insurance offer period • Fixed cover: you can increase your (and meet all the conditions in) the Good
(EmployeeSaver members) automatic unit-based death and TPD Health Declaration.
cover to up to eight units (as described
Take advantage of your special insurance above) and then transfer your unit-based You can still change your cover outside your
offer period to increase your cover with cover to the equivalent amount of fixed special insurance offer period , however any
minimal underwriting requirements. cover, if you complete (and meet all the increase in cover will be subject to
conditions in) a Good Health Declaration. underwriting requirements. Refer to page 8
For new EmployeeSaver members starting for further detail.
You can increase your cover during the
work with a VicSuper participating employer,
special insurance offer period and then Also at any time, if you are eligible, you may
the special insurance offer period is 60 days
transfer to fixed cover at a elect an approved occupation category for
from the date of your VicSuper letter
later date, if you wish, however you will your fixed death and TPD cover, and
confirming your insurance cover.
need to complete the Good Health approved or own approved occupation
Action you can take Declaration again. category for your income protection cover.
During your special insurance offer period • Income protection cover: you can To do so, simply complete the Insurance
there are opportunities to make changes to increase your income protection cover up request form including the Employer
your cover with minimal underwriting to eight units (including your default Certification.
requirements, which means you may not cover) worth $4,000 per month if you If you would like more information regarding
need to complete lengthy forms or undergo complete (and meet all the conditions the special insurance offer period, please
medical tests. in) a Good Health Declaration and call our Member Centre on 1300 366 216.
statement of earnings. You can also
Once you elect to make a change to your reduce your default waiting period of
death and TPD or income protection cover, 90 days to 60 or 30 days by completing
your special insurance offer period ends. the same Good Health Declaration.
You can extend your benefit period from
two years to five years by completing the
Insurer’s Abbreviated Personal Statement
in addition to the Insurance request form.
• Cancelling cover: if you cancel your
cover before the special insurance offer
period ends, any premiums deducted
from your account will be refunded.
7Section 2 | Automatic cover and changing your cover
Insurance handbook
Underwriting requirements when making changes to your cover Transferring death and TPD
unit-based cover to fixed cover
Depending on the type and level of cover you are applying for, you will need to complete the
Insurance request form and may also need to complete the Insurer’s Abbreviated Personal
(and vice versa)
Statement or Personal Statement as follows: Any insurance cover you have under the
unit-based option can be transferred to an
Total death and TPD cover amount Underwriting requirement equivalent level of fixed cover if you
complete (and meet all the conditions in)
Up to $515,000 (or unit-based equivalent) The Insurer’s Abbreviated Personal Statement2
a Good Health Declaration.
Above $515,000 (or unit-based The Insurer’s Personal Statement3 If you have fixed cover and wish to transfer
equivalent) to unit based cover, you can do this without
Transfer current amount of unit-based Good Health Declaration1 having to complete any underwriting
cover to fixed cover requirements. If you make this transfer,
you will be provided with an equivalent
Total income protection cover amount Underwriting requirement number of units, rounded up to the nearest
or change in cover whole unit.
Up to 10 units with a 2 year benefit period The Insurer’s Abbreviated Personal Statement2 Changes to occupation category
and 90 day waiting period (EmployeeSaver
members only) To apply for cover under the approved
occupation or own approved occupation
Any other change (including taking up The Insurer’s Personal Statement3 (income protection only) categories, please
income protection) complete the Insurance request form and
1 If you cannot satisfy the conditions of the Good Health Declaration you will be required to complete the Insurer’s ensure the Employer Certification section is
Abbreviated Personal Statement, which is available from vicsuper.com.au/forms completed correctly.
2 If you cannot satisfy the conditions of the Insurer’s Abbreviated Personal Statement you will be required to complete the If you were in the own approved occupation
Insurer’s Personal Statement, which is available from vicsuper.com.au/forms
category for TPD cover prior to 1 July 2014,
3 Depending on the information you provide in the Insurer’s Personal Statement, you may be asked to have a medical
examination or blood tests. The cost of any medicals, reports or pathology tests that are required to verify your health during you can still make changes to your cover
the underwriting process will be paid for by the Insurer. (increase or decrease), and keep the own
approved occupation category. See page 25
Apply online The Insurer may impose special conditions for further information and premium rates.
You can make changes to your insurance such as premium loadings, restrictions and/ High risk occupations
cover online, using the online insurance or exclusions, or may decline your
application for cover or additional cover Applications for additional insurance cover
application forms available at vicsuper.com. and longer benefit periods may be declined
au/insurance. These online forms include entirely. If a premium loading, restriction
and/or exclusion applies to your insurance due to your current occupation. The Insurer
the underwriting requirements as outlined will not consider applications for certain
in the table above. cover and you would like this reviewed by
the Insurer, you may need to cover the high-risk occupations such as, prison
For VicSuper EmployeeSaver members costs of any medical evidence required to officers, members of armed forces and
within their special insurance offer period, have your cover reassessed. police forces, members who work in and
the underwriting requirements listed may around mining sites and members who
not be required. Your increased insurance cover is effective work with explosives or hazardous materials
from the date it is approved by the Insurer or waste. Some self-employed members
You can decrease your death and TPD and in writing and will continue, provided that are also considered high-risk (depending on
income protection cover at any time without you have sufficient funds in your account to a number of factors) and applications may
having to complete any of the underwriting pay for the premiums at all times. You can be declined on this basis. If you need
requirements. With your income protection top up your account at any time by making further information, please call our Member
cover, you can also reduce your benefit a personal contribution. Centre on 1300 366 216.
period or increase your waiting period
without having to complete any of the For PersonalSaver members, if you do not
underwriting requirements. have any money in your account at the time
of acceptance, you will not be covered until
such time as we receive sufficient funds into
your account.
If you don’t already have TPD cover, you
must be under age 65 when applying for
new or increased TPD cover.
8Automatic cover and changing your cover | Section 2
Insurance handbook
Interim cover Life events cover (death only or • you must disclose any exclusions that
death and TPD cover) apply to the cover
Interim cover for accidental death, or
disablement caused by accidental injury is As you go through life, certain events may • no loadings apply to the cover
provided while your application for new or change the level of insurance cover you • you subsequently cancel that cover
additional cover is being assessed by the require – for example, when you buy your within 60 days of receiving confirmation
Insurer. Interim cover commences from the first house or have a child. from VicSuper of the transfer.
date VicSuper receives your application, the The maximum amount of cover you will
With life events cover, you can increase your
Insurer’s Abbreviated Personal Statement have is the greater of the cover with either
insured level of death only cover, or death
and/or Personal Statement until the your transferring fund or the cover in
and TPD cover, by the equivalent of two
earliest of: VicSuper. It is not the total of the combined
units per 12-month period (or equivalent
• the date the Insurer accepts or limits the dollar value for fixed cover) without cover. You cannot transfer any income
application completing any underwriting requirements, protection cover to VicSuper.
• 20 business days after an application is to a maximum of six additional units over For more information and conditions please
declined the life of your cover, when: call our Member Centre on 1300 366 216.
• the application is withdrawn • you marry or register a de facto
• 60 days from the date the interim cover relationship (including same sex) Cancelling cover
commenced, or • you divorce or register a separation from You can cancel your insurance cover at
• the cover is stopped under the terms of a marriage or de facto relationship any time by logging on to VicSuper
the policy. • you have a child or adopt a child MembersOnline, completing the Insurance
The amount of interim cover available is the • you take out a mortgage on the initial request form or by completing the online
lesser of the amount of cover you have purchase of a primary residence application at vicsuper.com.au/insurance.
applied for, and: Your insurance cancellation will be effective
• you increase an existing mortgage on
from the day you elect to cancel cover if
• interim cover for accidental death: your primary residence for renovations/
you are completing it online, or the day
$5 million extension (the mortgage increase must
VicSuper receives your written notification.
• interim cover for accidental TPD: up to be $50,000 or more)
$5 million (however, under the ‘unable • your child turns 12
EmployeeSaver members
to work’ definition of TPD the maximum • you reach the first anniversary of a
benefit is $3.09 million) Remember, even if you have not applied
marriage or de facto relationship, or
for insurance, you may have been
• interim cover for accidental injury • you have been separated from a
automatically covered for six units of death
(income protection): $30,000 per month marriage or de-facto relationship for
and TPD cover and six units of income
for a maximum of 2 years. 12 months.
protection cover when you joined your
No benefit will be payable under interim You must apply for your life event increase VicSuper participating employer. If you
cover where: within 2 months of the event occurring. Any cancel your cover before your special
• death was caused by suicide, or additional cover obtained under a life event insurance offer period ends, you will receive
intentional self-injury, including will be subject to the same premium a full refund of premiums deducted
intentionally contracted infection by loadings, restrictions and/or exclusions since your insurance cover commenced.
bacteria or virus, or any attempt thereat; or applicable to any other cover you may have.
• disablement was caused by attempted Please refer to the Life events application Re-commencement of cover
suicide, or intentional self-injury, including form for further specific details, eligibility
criteria and evidence required (available If you have previously cancelled your cover
intentionally contracted infection by
from vicsuper.com.au/forms). you will need to reapply for cover by
bacteria or virus, or any attempt thereat.
completing an Insurance request form and
The maximum amount of interim cover is Transferring cover from another the Insurer’s Personal Statement. Cover will
limited to $1 million (for death or TPD) and fund recommence from the date your request is
$10,000 per month (for income protection) If you have death and TPD cover with approved by the Insurer in writing, provided
where death or disablement was as a result another superannuation fund, you may be you have sufficient funds in your account to
of, or associated with: able to transfer that cover into VicSuper pay the premiums.
• making or attempting to make a flight in provided that:
an aircraft (other than as a passenger for • cover has been underwritten using a
whom a fare or fee has been paid, or as Personal Statement
a passenger in an aircraft under charter),
• the other superannuation fund is an
or
employer-sponsored fund
• taking intoxicating liquor or drugs.
9Section 3 | Death and TPD cover
Insurance handbook
Death and TPD cover
Death and TPD cover is intended to provide Fixed cover What is the cost of death and TPD
a lump sum benefit to you if you become cover?
Fixed cover is different from unit-based
permanently disabled, or to your family if
cover in that the level of cover remains the
you pass away. You can elect death only Unit-based cover Fixed cover
same, but premiums generally increase as
cover, or death and TPD cover. You cannot
you grow older. With fixed cover, you can Death and TPD Annual premiums
have a higher amount of TPD cover than
choose your level of cover to suit your cover - $1.07 per are based on your
your death cover. All death and TPD cover
needs. Fixed cover enables you to apply for unit per week age last birthday
ceases at age 70. In the event of a claim,
a level of cover you may not be able to per $1,000 sum
the amount you are covered for is based on Death only cover
reach under unit-based cover. See the insured and the
your sum insured at the date of death - $0.39 per unit
maximum limits below. If you already have occupation
or TPD. per week
unit-based cover you may transfer your category (general
VicSuper has two different types of death existing level of unit-based cover to fixed or approved) that
and TPD cover – unit-based cover and cover if you complete (and meet all the is applicable to
fixed cover. conditions in) a Good Health Declaration. you. See Table 2
Unit-based cover Reduction of fixed TPD cover on page 13 for the
premium rates for
With unit-based cover, your total amount of It is important to note that under fixed all cover types and
cover depends on your age and the number cover, between the ages of 60 and 64 the ages.
of units you have. You can select up to a TPD component of your fixed cover will
maximum of 60 units of death only or reduce by 1/60th per month (or part
death and TPD cover (subject to thereof) of the total amount of your benefit Premiums are deducted directly from your
underwriting requirements). Under at age 60. From age 64 there is no further VicSuper account at the end of each month
unit-based cover, the cost of cover remains reduction but a TPD benefit will only be in arrears and when you close your account.
the same but your level of cover decreases payable from age 65 if you suffer a Premium rates apply until 30 June 2015.
on a sliding scale relative to your age once permanent disability and you meet the General and approved occupation
you reach age 36. The amount of cover for Specific Loss or Future Care conditions of categories
each unit is outlined in Table 1 on page 12. the TPD definition (see page 14). The
maximum TPD benefit payable from age Under fixed death only or death and TPD
EmployeeSaver members 66 is $250,000. If you become terminally cover, if your gross annual salary is $75,000
ill or pass away after age 60, the full death or more, and you work in one of the
Six units of death and TPD cover are
benefit would be paid. See page 11 for approved occupations set out on page 28,
automatically provided to eligible new
an example. you may be eligible for the approved
EmployeeSaver members under the age
occupation rate. If you earn less than
of 65 when they join the fund. Eligible Indexation of fixed cover $75,000 or your occupation is not listed,
new members aged 65 to 69 when
Fixed death and TPD cover will be indexed the general occupation rate will apply.
they join the fund will receive six units of
to ensure benefits keep pace with inflation. If you work part-time, you can use your full
death only cover. The automatic cover is
Cover will automatically increase on 1 July time equivalent gross annual salary to
subject to eligibility criteria outlined on
each year by the lesser of CPI and 7.5%, determine your eligibility for the approved
page 6, and some members may be
subject to the maximum cover amounts. If occupation category.
subject to limited cover - see page 6.
you wish, you can opt out of these Maximum cover limits
increases by completing the Insurance
request form which is attached to the back The maximum amounts of death and
of this handbook. If you opt out of the CPI TPD insurance cover you can apply for
increase, you will be required to complete are as follows:
the underwriting requirements if you want • death: unlimited
to opt back in at a later date. • TPD: up to $5 million (however, under
the ‘Unable to Work’ definition of TPD
the maximum benefit is $3.09 million).
For unit-based cover, the maximum number
of units allowed is 60. If the amount of
cover you require is in excess of 60 units
then you will need to apply for fixed cover.
10Death and TPD cover | Section 3
Insurance handbook
Example calculations
The table below provides examples of how to calculate your level of cover and premium.
Example 1 - Unit-based cover Example 2 - Fixed cover
Luke is 37 years old and wants 10 units of death and TPD cover. Jennifer is 45 years old and earns a gross annual salary of $68,000
per year. As Jennifer’s salary is under $75,000 she falls under the
His level of cover will be:
general occupation category.
$46,000 (sum insured for age 37)
x 10 units of cover She wants $250,000 of death and TPD cover.
= $460,000
His premium is calculated as follows: Jennifer’s premium is calculated as follows:
$1.07 x 10 units of cover The rate for death and TPD cover under the general category for a
= $10.70 per week 45 year old is $3.15 per $1,000 sum insured.
or $557.93 per year, calculated as follows:
The annual premium will be
$10.70 ÷ 7 x 365
$3.15 x 250,000
= $557.93
÷ 1,000
= $787.50
This premium will increase each year on Jennifer’s birthday.
Example 3 - Fixed cover TPD reduction from age 60
From age 60 to 64, the TPD component of fixed cover reduces by 1/60th per month (or part thereof) of the total amount of cover at age
60. For example:
Grace is age 63 and 4 months old and had $900,000 fixed death and TPD cover when she was age 60. The monthly TPD cover
reduction is calculated as follows:
$900,000 x 1/60
= $15,000
This means the cover will reduce by $15,000 per month (or part thereof) after Grace turns 60.
Months from age 60 to 63 and 4 months = 40
40 months x $15,000
= $600,000
The reduced TPD benefit therefore is
$900,000 – $600,000
= $300,000
If Grace were to cease work due to disability and was deemed to be totally and permanently disabled at this age, the TPD benefit payable
would be $300,000. If however, Grace became terminally ill or passed away at this age, the full $900,000 benefit would be payable.
By age 64 Grace’s TPD benefit would have reduced to $180,000. There is no further reduction from age 64. The maximum TPD benefit
from age 66 is $250,000 but this will not impact on Grace.
Need help with the calculations?
Use our online insurance calculators to work out your premium and
level of cover. Visit vicsuper.com.au/calculators
11Section 3 | Death and TPD cover
Insurance handbook
Table 1: Unit-based death only and death and TPD cover
Premiums and sum insured per unit apply until 31 December 2015.
Age last birthday Cover for one unit ($) Default cover ($) for eligible
EmployeeSaver members (6 units)
14-35 51,500 309,000
36 46,000 276,000
37 46,000 276,000
38 45,500 273,000
39 45,500 273,000
40 40,500 243,000
41 40,500 243,000
42 40,000 240,000
43 35,000 210,000
44 29,000 174,000
45 24,000 144,000
46 20,000 120,000
47 17,000 102,000
48 15,000 90,000
49 13,000 78,000
50 11,000 66,000
51 10,000 60,000
52 9,000 54,000
53 8,000 48,000
54 7,000 42,000
55 6,200 37,200
56 5,500 33,000
57 4,750 28,500
58 4,250 25,500
59 3,750 22,500
60 3,500 21,000
61 3,000 18,000
62 2,500 15,000
63 2,000 12,000
64 1,750 10,500
65 1,500 9,000
66 1,400 8,400
67 1,350 8,100
68 1,250 7,500
69 1,150 6,900
70 0 0
If you join VicSuper on or after your 65th birthday, TPD cover is not available.
12Death and TPD cover | Section 3
Insurance handbook
Table 2: Fixed cover premiums for death only and death and TPD cover
Annual rates per $1,000 sum insured. Premiums apply until 31 December 2015. For own approved occupation rates, see Section 7, page 26.
Age last General occupation Approved occupation
birthday
Death only ($) Death and TPD ($) Death only ($) Death and TPD ($)
14 0.55 0.79 0.45 0.64
15 0.55 0.79 0.45 0.64
16 0.64 0.91 0.52 0.75
17 0.68 0.97 0.55 0.79
18 0.76 1.08 0.58 0.83
19 0.74 1.06 0.58 0.83
20 0.66 0.95 0.53 0.77
21 0.64 0.91 0.52 0.75
22 0.58 0.83 0.48 0.68
23 0.56 0.81 0.47 0.66
24 0.52 0.75 0.42 0.60
25 0.50 0.70 0.39 0.56
26 0.47 0.66 0.37 0.54
27 0.48 0.68 0.37 0.54
28 0.48 0.68 0.39 0.56
29 0.50 0.70 0.39 0.56
30 0.52 0.75 0.40 0.58
31 0.52 0.75 0.43 0.62
32 0.58 0.83 0.48 0.68
33 0.64 0.91 0.52 0.75
34 0.68 0.97 0.55 0.79
35 0.77 1.10 0.60 0.87
36 0.85 1.24 0.64 0.95
37 0.92 1.35 0.72 1.10
38 1.05 1.53 0.81 1.24
39 1.11 1.72 0.87 1.39
40 1.24 1.93 0.97 1.55
41 1.32 2.15 1.06 1.72
42 1.43 2.36 1.14 1.88
43 1.50 2.57 1.19 2.05
44 1.64 2.84 1.30 2.26
45 1.75 3.15 1.42 2.53
46 1.88 3.52 1.53 2.77
47 2.06 3.97 1.67 3.17
48 2.30 4.49 1.87 3.58
49 2.54 5.11 2.06 4.08
50 2.80 5.80 2.30 4.64
51 3.09 6.54 2.54 5.22
52 3.36 7.29 2.77 5.82
53 3.62 8.05 2.99 6.46
54 3.96 8.98 3.28 7.20
55 4.28 10.18 3.56 8.14
56 4.67 11.51 3.90 9.21
57 5.04 12.98 4.23 10.37
58 5.47 14.61 4.62 11.70
59 5.92 16.58 5.02 13.27
60 6.78 18.98 5.75 15.19
61 7.78 21.82 6.60 17.45
62 8.90 25.19 7.57 20.16
63 10.21 29.17 8.68 23.33
64 11.67 33.72 9.95 26.99
65 13.14 38.48 11.19 30.80
66 14.73 43.72 12.54 35.00
67 16.49 49.62 14.02 39.70
68 18.32 56.10 15.60 44.90
69 20.30 63.26 17.28 50.65
70 0 0 0 0
13Section 4 | General information about death and TPD cover
Insurance handbook
General information about
death and TPD cover
What is Total and Permanent Part (a) Specific Loss Part (c) Unable to Work
Disablement (TPD)? You suffer an injury or illness which first While you were engaged in regular
became apparent after becoming insured in remunerative work, you suffer an injury or
Under the TPD rules, in most cases you
VicSuper, and, as a result of the injury or illness that stops you from working in any
would be assessed under the ‘Unable to
illness, you have suffered the total loss of business, occupation or regular duties
Work’ definition (Part (c) below) when
(or total loss of the use of): continuously for the TPD waiting period.
claiming a benefit. However, a benefit may
• both hands or feet, or
also be payable under the Specific Loss
• one hand and one foot, or Members who had TPD cover prior to
(Part (a)) or Future Care (Part (b))
definitions as well as being unable to work. • the sight of both eyes, or 1 July 2014
The relevant definitions are set out below. • one hand or foot and the sight in one If you had TPD cover prior to 1 July
eye, 2014, there are some differences in the
Total and Permanent Disablement means definition of TPD as follows:
in circumstances where the loss will never
you suffer a permanent disability (as • If you meet the definition in Parts (a)
be regained.
defined below) and: or (b), permanent disability will not
• you meet the definition of Parts (a) or Part (b) Future Care be subject to the Insurer’s opinion as
(b) below, or When all of the following apply to you: to your likelihood to ever work in or
• at the time you suffered the injury or • You suffer an injury or illness which first attend to regular remunerative work
illness you were engaged in regular occurs after becoming insured under the for which you are reasonably fitted by
remunerative work (as defined below) Insurer’s policy, and education, training or experience.
as a full-time employee (as defined • Because of that injury or illness, in the • If you had elected own approved
below), and meet the definition of Insurer’s opinion, you are permanently occupation TPD, permanent disability
Part (c). unable to perform at least two of the five instead means in the Insurer’s opinion
This means if you are aged 65 or more “Activities of Daily Living” listed below, you have become incapacitated by
and/or not engaged in regular without assistance from another person: injury or illness to such an extent that
remunerative work as a full-time – bathing/showering, you unlikely to ever work in or attend
employee: – dressing/undressing, your own occupation.
• the definition of TPD means you suffer a – eating/drinking,
permanent disability and you meet – using the toilet to maintain personal If you meet the definition of TPD under the
either the Specific Loss (Part (a)) or hygiene, Insurer’s policy, the insured benefit will be
Future Care (Part (b)) definitions below; – getting in and out of bed, a chair, a paid to VicSuper and can be paid to you
and wheelchair or moving from place to provided you meet a condition of release
• you cannot be paid a TPD benefit if you place by walking, a wheelchair or with under the Superannuation Industry
only meet the Unable to Work (Part (c)) a walking aid. (Supervision) Act 1993 (Cwlth). This would
definition. generally be on the grounds of permanent
incapacity.
Permanent disability means, after considering all evidence which the Insurer believes is
necessary to reach their view, in their opinion you have become incapacitated by injury or In the case where VicSuper determines a
illness (whether physical or mental) to such an extent that you are unlikely to ever be able condition of release has not been met, the
to, work in any business, occupation or regular duties, whether paid or unpaid, for which TPD benefit will be placed in your VicSuper
you are reasonably fitted by education, training or experience. account until such time as a condition of
release is met. An example of this may be
Full-time employee means: where you have elected the own approved
• a permanent employee required to work 10 hours or more per week as part of their occupation category and in the Insurer’s
normal duties, or opinion you are unlikely to ever work in
• any other employee who has worked for the employer an average of 10 hours or more your own occupation ever again, however
per week over a period of 12 consecutive months, or where the employee has worked you may be able to work in a different type
for the employer for less than 12 consecutive months the employee has worked an of occupation.
average of 10 hours or more per week for the employer from the date he or she
TPD benefits are generally paid as a lump
commenced working for the employer.
sum, however you may like to consider
Regular remunerative work means, you were engaged in regular remunerative work if beginning a VicSuper Pension or you can
you are doing work in any employment, business or occupation. You must be doing the leave the lump sum amount in your
work for reward – or hope of reward – of any type. VicSuper account and make partial
withdrawals when required. A VicSuper
Financial Planner may be able to assist you
in making the right decision for you, based
on your circumstances.
14General information about death and TPD cover | Section 4
Insurance handbook
What is the waiting period Exclusions or exceptions for If you are travelling overseas, or have
moved overseas, your cover will continue.
for a TPD claim? death and TPD cover However a benefit is not payable for
TPD benefits are subject to waiting periods There are currently no blanket pre-existing death, accidental death, terminal illness
as below. condition exclusions. However, depending or TPD caused by an act of war whilst you
on the health evidence supplied during the are overseas.
Day one TPD application process, individual special
In the event of a TPD or terminal illness
If you are diagnosed by a medical conditions such as exclusions, restrictions
claim you may be required to return to
practitioner (as defined below) as suffering and/or premium loadings may apply to your
Australia at your own expense for medical
one of the conditions listed below, the death and/or TPD cover.
treatment or assessment. A benefit for TPD
Insurer will waive the TPD waiting period
or terminal illness may not be payable if
when assessing a claim made under the Cover during leave without you do not return to Australia.
‘Unable to Work’ definition of TPD. This
means you can apply to claim your benefit pay, including parental leave
immediately. The conditions are: If you are on leave without pay for reasons Leaving a participating
• Alzheimer’s disease and other dementias other than injury or illness, including employer (EmployeeSaver
• Cardiomyopathy parental leave, your death only or death and members)
• Diplegia TPD cover can continue for up to a
maximum of seven years provided that: If you leave your VicSuper participating
• Hemiplegia employer, but you remain an EmployeeSaver
• Lung disease • your employer has approved in writing
your period of leave, and member, your death and TPD cover
• Major head injury continues provided that you continue to
• you have sufficient funds in your
• Motor neurone disease meet policy conditions including having
VicSuper account to pay for the
• Multiple sclerosis sufficient funds in your account to meet the
premiums at all times.
• Muscular dystrophy premiums at all times.
• Paraplegia If you would like cover for longer than
• Parkinson’s disease
seven years, you must notify the Insurer in When does cover stop?
writing before commencing the leave
• Permanent blindness Your death only or death and TPD cover will
without pay period. You will receive written
• Permanent deafness notification from the Insurer regarding this cease at the earliest of the following
• Permanent loss of speech leave and if it will be covered under situations:
• Primary pulmonary hypertension the policy. • once there are insufficient funds in your
• Quadriplegia FutureSaver account to meet your
If you’re on leave without pay, including premiums
• Severe rheumatoid arthritis parental leave, the Insurer may decline
• Tetraplegia. • you advise VicSuper to cancel your cover
requests to increase or make changes to
your TPD cover until you return to work. • your FutureSaver account is closed
Medical practitioner means, a registered
• you turn age 70
medical practitioner who is appropriately
• a death, TPD or terminal illness benefit is
qualified to treat the person insured for Overseas cover paid
their injury or illness. The medical
Your death only and death and TPD cover • you cease to be eligible for cover under
practitioner cannot be the person insured or
will continue for a maximum of three years VicSuper’s governing rules
their family member, business partner,
while you are overseas for the purpose of • you are on unpaid leave for longer than
employee or employer.
the participating employer provided that any the agreed period of time (usually seven
Three month waiting period details of your temporary overseas years but may be extended with the
A three month waiting period will apply if arrangements required by the Insurer are Insurer’s agreement)
your claim is being assessed under the made available when requested. However a
• you make a fraudulent claim.
`Unable to Work’ (Part (c)) TPD definition benefit is not payable for death, accidental
and you are not suffering one of the death, terminal illness or TPD caused by an
conditions listed under ‘Day one TPD’ act of war whilst you are overseas for the Account closure
above. purpose of your employer. If your overseas If your FutureSaver account is closed, there
temporary employment is extended beyond is no option to continue your insurance
No waiting period three years you must provide advance cover provided by the Insurer.
There is no waiting period for a TPD benefit written notification to VicSuper to ensure
under the ‘Specific Loss’ (Part (a)) or you remain covered. Depending on the
‘Future Care’ (Part (b)) definitions. circumstances, the Insurer may increase the
premium and/or apply special conditions.
15Section 4 | General information about death and TPD cover
Insurance handbook
Making a death or TPD claim Making a TPD claim 3. VicSuper receives and reviews your
There are a number of steps involved in documentation
Making a claim on your insurance cover can Once all required information has been
be a lengthy process, however VicSuper is making a TPD claim, and the claim process
can sometimes be quite lengthy. The received by VicSuper (including the
committed to assisting members to ensure Employer Statement), all documentation
a claim is made as simple as possible. You sooner you notify VicSuper of your illness or
injury, the better. A delay in lodging your is sent to the Insurer for assessment. If
don’t necessarily need to engage in advice further information is required prior to
from a legal professional to make a claim; claim may complicate and extend the
assessment process. Generally your sum the claim being sent to the Insurer,
VicSuper works hard with our Insurer to VicSuper will contact you.
ensure the best possible outcome for the insured is calculated at the date you ceased
member is achieved, as quickly as possible. work due to illness or injury (ie the date you 4. The Insurer assesses your claim
were last physically at work) and your age at During the assessment process by the
Making a death claim that time. Insurer you may be asked directly by the
For a death benefit to be claimed, VicSuper The steps below outline what is involved in Insurer to provide additional information
must be notified and appropriate paperwork the TPD claim process. or attend an independent medical
will then be forwarded to your dependents examination, or they may ask your
or your executor to complete. The insured 1. Contact the VicSuper Member Centre medical practitioner, employer or other
benefit paid will be based on the sum to discuss your situation insurers for further information. Any
insured at the date of death, in addition to During this phone call, you will be asked additional medical reports or examinations
the account balance (applicable premiums a series of questions, including your will be paid for by the Insurer.
and fees will be deducted). personal details and member number,
the date you last worked prior to your 5. The Insurer makes a decision
Making a terminal illness claim illness or injury, the name of your last After considering all the information
You are insured for terminal illness as part employer and the nature of your illness provided, the Insurer will make a decision
of your death only cover and death and or injury. to accept, defer or decline your claim.
TPD cover, which is an advance payment of This decision is based on whether, in
2. Claim documentation will be sent their opinion, you meet the definition of
the death benefit. Terminal illness means to you
any illness in which you are not expected to TPD under the policy. The Insurer will
Following your initial contact with notify VicSuper of the decision.
live more than 12 months regardless of any VicSuper, initial claim documentation will
treatment undertaken. be sent to you. All forms need to be 6. VicSuper reviews the Insurer’s decision
You will need to get two registered medical completed with as much detail as VicSuper is obliged to act in the best
practitioners to certify that you are suffering possible in order for your claim to be interests of all members and therefore
from an illness that is likely to result in assessed by the Insurer. The will review the Insurer’s decision.
death within 12 months of certification. At documentation will include VicSuper will either agree or disagree
least one of the registered medical – Disability Claim form, including a with the Insurer’s decision to accept,
practitioners must be a specialist practicing requirement to provide certified proof defer or decline your claim.
in the area related to the illness. There is no of identity – Accept – if your claim is accepted
waiting period for a terminal illness benefit. – Member Statement VicSuper will notify you and you can
– Medical Practitioner Statement elect to either take all or part of your
Provided that the Insurer agrees with the benefit in cash, leave part or all of your
certification, a benefit will be payable Any costs incurred for completing the benefit in a new VicSuper FutureSaver
calculated on the latest date of the initial documentation will be at your own account, roll your benefit to a VicSuper
certificates provided by the medical expense. Initial assessment of your claim Pension or rollover to another
practitioners. can begin during the waiting period. superannuation fund. Whatever you
The terminal illness benefit is the amount of Your employer will also be contacted at decide, you will be required to
your insured death benefit and your super this stage to complete an Employer complete one final form indicating your
account balance (applicable premiums and Statement. This statement includes preference.
fees will be deducted). information about the type of work and – Defer – if VicSuper agrees with the
duties of your role prior to your illness or Insurer’s decision to defer your claim
injury, your period of employment until the extent of your illness or injury
including your last day at work and any can be further assessed, we will notify
other relevant employment related you in writing. In some cases, you may
information. be given the opportunity to provide
further evidence to support your claim,
which may result in another
assessment prior to the end of the
deferral period.
16General information about death and TPD cover | Section 4
Insurance handbook
– Decline – If VicSuper agrees with the If VicSuper disagrees with the Insurer’s
Insurer’s decision to decline your claim, decision to defer or decline your claim, Superannuation Complaints
we will write to you outlining the we may ask for further medical evidence Tribunal (SCT)
reasons for the decline. You will be or ask the Insurer to re-consider their To ensure you retain your right to
provided with all the medical evidence decision. ultimately complain to the SCT if you are
used to come to this decision, and be 7. If you disagree with the decision made dissatisfied with the outcome of your
given the opportunity to provide a Following the review of the Insurer’s TPD claim, you must ensure your claim
further submission in the form of decision, if you disagree with the for the payment of a TPD benefit is
medical evidence to support your decision made or how your claim has made to the Trustee (VicSuper) within
claim. Your claim will then be further been managed, you can lodge a 2 years of you permanently ceasing
assessed by both the Insurer and complaint in writing to VicSuper. VicSuper employment, and your claim is made to
VicSuper, and either agree to continue has 90 days in which to respond to your the SCT within 4 years of the Trustee’s
assessment or uphold the original complaint. If you are still concerned decision about your claim.
decline decision. about the response or the management
of your claim you can contact the
Superannuation Complaints Tribunal.
17Section 5 | Income protection cover
Insurance handbook
Income protection cover
Income protection cover is designed to provide you with replacement income in the event that an injury or illness
impacts your earning capacity and causes total or partial disability. The value of income protection cover is stated in
units. Each unit of cover is worth $500 per month. Income protection cover ceases at age 65.
Eligibility for income Your cover will not automatically increase to Benefit waiting period
reflect a change to your salary. If your salary
protection cover increases you may apply for an increase in You can apply for a benefit waiting period of
You are eligible for income protection cover cover up to 75% of your new gross annual 30, 60 or 90 days. No benefit will be paid
provided that you are: salary plus 10% superannuation during the waiting period. The waiting
• an employed or self-employed VicSuper contributions (to a maximum of $30,000 period starts when a medical practitioner,
FutureSaver member, and per month inclusive of superannuation after examining you for the relevant illness
contributions). Any increase in cover is or injury, certifies that you are totally
• working at least 10 hours per week, and
subject to completing underwriting disabled. You should consider your ability to
• aged 14 years or older but under age 65,
requirements. Therefore, you should support yourself through sick leave, annual
and
consider your level of cover from time to leave and personal savings, along with the
• legally permitted to reside and work for cost of premiums, in determining the most
reward in Australia. time to reflect salary movements.
appropriate waiting period for you.
Default income protection cover –
How much income protection EmployeeSaver members Electing income protection
cover can I apply for? Eligible new EmployeeSaver members cover under the own
You can apply for income protection cover are automatically provided with six units approved occupation
for up to 75% of your gross annual salary ($3,000 per month) of income
or active business income if you are
category
protection cover with a 90 day waiting
self-employed at the time of application, period and a two year benefit period To be eligible for cover under the own
plus 10% superannuation contributions, subject to the eligibility criteria on page approved occupation category, you must
subject to a maximum of $30,000 per 6 being met. satisfy the approved occupation criteria of a
month (inclusive of superannuation gross annual salary of at least $75,000 and
If your gross annual salary is below work in one of the approved occupations
contributions).
$42,350, the $3,000 per month listed on page 28. The own approved
Gross annual salary means annual salary automatic cover will be more than you occupation category only applies to benefit
before tax and excludes commissions, are entitled to receive in the event of a periods of five years or to age 65.
bonuses, investment, interest income and claim. You should consider whether this
employer SG contributions you were level of cover is appropriate for you. In the event of an income protection claim
receiving immediately before the date you under the own approved occupation
ceased work as a result of injury or illness. category, you will be entitled to the income
For members employed in a casual capacity Benefit payment period protection benefit if the Insurer considers
the annual salary is calculated as the that you are unable to undertake the regular
You can apply for a benefit payment period
average salary earned in the previous 12 duties of your own occupation, rather than
of up to two years, up to five years or up
months immediately before the date you any occupation. This may appeal to you if
until age 65. If you make a successful
ceased work as a result of injury or illness. you work in a specialised occupation and
income protection claim you will receive
your earning capacity would be significantly
In the event of a successful claim, income benefit payments for your selected benefit
less in any other field.
protection benefits will be limited to the payment period, subject to you meeting the
lesser of the amount of cover you have criteria for ongoing payment of a benefit.
applied for and 75% of your gross annual Benefits are paid monthly in arrears. What will income protection
salary at the time of disability, plus 10% A two year benefit period has a lower
cover cost me?
superannuation contributions, to a premium than a five year benefit period or Income protection premiums are calculated
maximum of $30,000 per month inclusive a benefit period to age 65. based on your age last birthday, level of
of superannuation contributions. cover, the benefit period, the waiting period
This means, if you have a higher level of and the occupation category (general,
cover and your salary decreases, you will approved or own approved).
not receive the higher level of income Table 3 on page 20 shows how much
protection cover. income protection insurance will cost you
per week for each unit of cover (each unit
of cover is worth $500 per month).
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