TAL pledges to waive pandemic life insurer exclusions for super funds

The insurance company representing four major superannuation companies has pledged it will not apply pandemic exclusions for life insurance as the nation faces a rising death toll from the coronavirus pandemic.

TAL is the insurer for UniSuper, Prime Super, TWU Super and NGS Super who all have exclusions for death insurance in the case of a pandemic. But after pressure from the consumer advocate and meetings with the funds, the insurer has pledged to waive these exclusions.

"As the COVID-19 situation has evolved very rapidly, TAL has been gathering information and assessing the situation accordingly and in consultation with our superannuation fund partners," a TAL spokeswoman said in a statement.

"TAL has confirmed to each of these superannuation funds that the pandemic exclusions set out in the policy will not apply."

Makeshift medical wards are popping up around the world to deal with the rising death toll of coronavirus. Credit:Handout

QSuper, however, is a $113 billion government-owned fund based in Brisbane that is standing by its pandemic exclusion that is relevant to new members who do not sign up through the default system, or those wishing to increase their level of cover.

The majority of existing members at these funds will be covered, but Super Consumers said it had found people had been denied pandemic-related total and permanent disability or income protection if they recently opened an account with QSuper or tried to increase their coverage.

QSuper said exclusion clauses were designed to reduce the cost of premiums and while the clause was waived for existing customers who were defaulted into the fund, new members would be made aware of the exclusion before joining.

QSuper chief of member experience Jason Murray said the fund worked to keep its insurance cover affordable and accessible.

“That means balancing features and exclusions for the benefit of the membership overall,” he said. “QSuper is a not for profit fund and we are focused on protecting our existing members’ retirement savings and insured benefits first and foremost.

“Without a pandemic clause for new non-default members we ran the risk that we would have to increase premiums for everyone who we try to service with economical insurance coverage."

HESTA, Colonial First State FirstChoice and Care Super also have these pandemic exclusions for people who have recently signed up or increased the level of cover. But in recent weeks, these funds have asked insurers to waive these exclusions.

Super Consumers director Xavier O'Halloran said an assurance from the insurance company did not go far enough and called for the policy to be re-written.

"Anyone who doesn't read the reporting, or remember the comms from their super funds would just go to the policy and see they can't claim. It's really incumbent on the funds to inform their membership if they're not going to rely on these terms and they should remove them," Mr O'Halloran said.

Chief operating officer at the Association of Financial Advisors, Phil Anderson, said the majority of life and income protection insurance products sold to individuals by financial advisors included cover for pandemics. "If you pass away because of coronavirus, you will be paid out," he said. "The issue is with the group insurance market."

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