Frontline workers face life insurance claims denials

Five super funds continue to hit new members with pandemic exclusions

Super Consumers Australia is urgently calling for super funds to remove pandemic exclusions from their life insurance policies. The call comes after finding 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 with one of these five funds:

• QSuper (Insurer – QInsure)
• TWU Superannuation Fund (Insurer – TAL)
• NGS Super (Insurer – TAL)
• UniSuper (Insurer – TAL)
• Prime Super (Insurer – TAL)

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,” says Super Consumers Australia Director, Xavier

“We are calling on all super funds and insurers to do the right thing and remove these unfair terms,” says O’Halloran.

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,” says O’Halloran.

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.

“We are calling on the remaining super funds to follow suit and back down on using these unfair restrictions,” says O’Halloran.

“We are pleased to see some funds come out and say they won’t rely on the pandemic exclusion, but we want to see them removed from policies altogether. There is a real risk that a person looking to claim on these policies may be misled into thinking they are not covered,” says O’Halloran.

How the pandemic exclusions apply in each of the funds

• QSuper – pandemic exclusions for total and permanent disability and income protection policies for members who have taken out additional cover after March 18, or joined the fund by choice (i.e. not defaulted) after March 18. Applies to the first 30 days of cover.
• 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.

If in doubt, we encourage members to contact their fund directly for further clarification.

Correction 27/03/2020: We have clarified that QSuper’s exemption only applies to the first 30 days of cover.

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