Superannuation insurance exists to ensure super funds pay out in the case of permanent disability or death to a member. The premiums you pay for this insurance will vary based on personal factors, as with any kind of coverage.
There may be a variety of discounts and plans available for you to take advantage of, based on your membership in various groups. A case recently settled between super fund QSuper and the Australian Financial Compliants Authority ended with a fund paying back part of a member's premiums after he realised he was eligible for a discounted rate.
In early April, the Federal Court of Australia upheld a verdict stating QSuper had overcharged one of its members, Financial Review reported. The case involved death and total impairment insurance. Physician Tommy Lam found he had been paying too much for this coverage because his professional occupation rating made him qualify for lower premiums. When he sought reimbursement for the higher premiums he had already paid, QSuper denied his request. The matter went to court in 2016.
Financial Review reported that the initial decision went the way of QSuper. However, Lam appealed and provided more information about whether he had been adequately informed of his eligibility for lower rates. On that appeal, the AFCA found QSuper was indeed liable for Lam's excess payments and court costs.
Though QSuper initially hinted that it could take the appeal process further – all the way to the High Court. Financial Standard reported in early May, however, that the the fund's board has decided against taking that action and will abide by the AFCA ruling. When announcing that it would drop the case, QSuper stated its concern that the decision may cause obligations for its trustees.
The regulations and norms around superannuation insurance are still evolving and receiving clarification, as the recent judgement affirms. When it comes time for a superannuation fund to pay out an insurance claim, you may have to dispute to get what you are owed.
If a loved one has died, for instance, and you believe you are eligible to receive the death benefit, it may be necessary to have experienced superannuation claims lawyers on your side. The insurance affecting super funds spans several categories, from total permanent disability and death to less catastrophic issues such as income protection for up to five years. Speak with Gerard Malouf & Partners to determine whether you have a case, and if so, to help you receive what you are owed.