Driving further improvements across the insurance industry.
The following is the relevant part of our insurance strategy that explains how we have designed our automatic (default) insurance cover.
Hostplus believes that the flexibility of the insurance design offered to members through a combination of default insurance cover and options for voluntary additional cover ensures that members’ insurance needs are adequately addressed.
Hostplus offers default (automatic) Death (including Terminal Illness) and TPD insurance cover that provides an appropriate safety net of insurance cover to all eligible members. In addition, Hostplus offers members the ability to apply for additional Death and TPD insurance cover or Income Protection cover where members believe the default arrangements are not sufficient for their requirements.
The determination of the level of default Death and TPD cover has been established based on a broad insurance needs evaluation by member age and an assessment to ensure it is appropriate and does not unduly erode a member’s account balance. Hostplus has resolved that to limit the cost of the default Death and TPD cover to below 1% of salary over the lifetime of the membership is an appropriate level of premium deductions, in considering the demographics and claims experience of the Fund. The 1% of salary limit corresponds to approximately 10% of Superannuation Guarantee which is considered reasonable without unduly eroding the retirement benefits of the member.
In determining the level of default Death and TPD cover, Hostplus has considered the insurance needs of our members. The Trustee recognises that insurance needs are determined by a number of factors including the members’ life stage, whether the member has dependants, living expenses, income and age. In considering this, in addition to the affordability trade-off, Hostplus has introduced a design where the number of units and cover levels vary by age.
Due to Hostplus having a large number of casual, part-time, seasonal and event workers each with different incomes, working hours and days of employment, the high cost of Income Protection cover is not offered as default. Income Protection cover is provided as optional if the member wishes to elect this type of cover.
Laws passed in October 2019 introduced the Putting Members’ Interests First (PMIF) rules which place further restrictions around the way insurance can be provided to superannuation fund members. On and from 1 April 2020, super funds cannot provide automatic default insurance cover:
The dangerous occupation exception can only apply if the fund trustee makes an election to apply it to a member's dangerous occupation and informs the regulator (the Australian Prudential Regulation Authority). Hostplus has decided not to elect to apply a dangerous occupation exception.
The employer-sponsor contribution exception can only apply where an employer has notified the super fund in writing that they will fund the full cost of the insurance cover for their employees.
Existing members who lost cover on 1 April 2020 will have the ability to opt back into default cover through the insurance section of their Member Online account if they have not previously cancelled or opted out of default cover. New members (including members under 25 or with an account balance below $6,000) can elect to receive default cover at any time or apply for cover at any stage during their membership.
Log in to Member Online to update and manage your insurance cover.
For more information on PMIF and what it means for you, visit our FAQs page.
In March 2019, the Federal Government passed the Protecting Your Super (PYS) legislation which requires super funds to remove insurance from accounts considered to be ‘inactive’ for 16 continuous months, unless the fund receives specific instructions from the account holder to maintain their insurance cover. Under the PYS legislation, an account is considered inactive if it has not received an amount (such as a contribution or rollover).
If a member is at risk of losing insurance on their account because it has been inactive for 16 continuous months, Hostplus will give the member a notice explaining when insurance may cease if the account remains inactive. These notices will be provided 7, 4 and 1 month before the date on which Hostplus may be required to remove insurance from the member's account under the PYS legislation.
For more information on PYS and what it means for you, visit our FAQs page.
The Insurance in Superannuation Voluntary Code of Practice (the Code) was the superannuation industry’s commitment to high standards when providing insurance to fund members.
The Code recognised the significant benefits of insurance in superannuation and aimed to improve these offerings by promoting industry standards and expectations on a range of key issues – including:
As a participating member of the Insurance in Superannuation Working Group that developed the Code, Hostplus strongly believed that the Code helped to ensure the right balance between providing adequate insurance cover and protection of members’ superannuation savings for retirement. As a result, we adopted the Code in 2018 and implemented numerous enhancements to improve the experience of our members. We were compliant with the key elements of the Code by December 2019.
Since the Code was established, most of the requirements have been superseded by legislative and regulatory reforms which Hostplus has implemented. For this reason, in July 2021 the Code Owners (the Association of Superannuation Funds of Australia, Autralian Institute of Superannuation Trustees and Financial Services Council) announced that they were replacing the Code with two guidance notes that address the Code requirements not covered by legislation, relating to improving outcomes for vulnerable members and improving claims handling.
While the Code has been replaced, Hostplus remains strongly committed to adhering to the principles of the Code and the new guidance notes.
The Hostplus claims team is passionate about being there for members and beneficiaries at a difficult time when we're needed the most. Our role is to guide and support the member or beneficiary through the entire claim journey with compassion and respect.
We promise to be there for our members and families, to guide and support them through the entire claim journey.
Our aim is to provide our members and their beneficiaries with:
Recognising this is a difficult time, Hostplus seeks to ensure all genuine claims are paid quickly with compassion and empathy. We will ensure that the insurer treats the claimant fairly and assesses the claim promptly.
Any adverse decision by the insurer will be reviewed by our Claims Review Committee (CRC). Where they believe the insurer has acted unreasonably or unfairly in a claim decision, they will take whatever action is necessary to resolve the outstanding claim.
The intention of Total and Permanent Disability cover is to provide you with an insured benefit if you become totally and permanently disabled as a result of an illness or injury. It is designed to replace your future earning capacity via a lump sum payment and provide you and your dependants with the financial support you need.
Total and Permanent Disability insurance cover is available to you regardless of your working hours or the basis on which you are employed, whether you are casual, part-time, contract or permanent.
Your capacity to work is assessed by Hostplus’ insurer and is determined by your ability to be employed or engaged in any gainful occupation, business, profession or employment for which you are reasonably suitable by your education, training or experience, not just your usual occupation or job you were performing when you become injured or ill. If you are not working or employed in any capacity 12 months prior to becoming injured or ill, different conditions may apply.
When reviewing your education, training or experience, we may consider for example the level of schooling you completed, further studies undertaken since then and any subsequent qualifications and certificates you have obtained or are obtaining, the skills and abilities you have acquired through work you have undertaken (both paid and unpaid), as well as any hobbies or interests.
The insured benefit is determined as at the date of the event occurring and the level of insurance cover at that time.
Income Protection insurance helps to protect your income if you can’t work because of illness or injury (temporarily and totally) by providing regular monthly payments to help you meet your living expenses.
You can apply for cover of up to 90% of your monthly pre-disability. If you are insured for this amount and in event of a successful claim, 75% of your monthly pre-disability salary is paid to you and 15% of your monthly pre-disability salary is paid into your Hostplus account, capped at $30,000 per month. You may, of course, choose to have Income Protection insurance cover that is less than 90% of your pre-disability salary.
We offer three waiting periods of 30, 60 or 90 days. A waiting period is the period during which you must be totally or partially disabled before an Income Protection benefit is payable. You do not receive a monthly benefit for the waiting period.
The benefit period is the maximum period of time that a benefit will be paid for any one illness or injury which you are totally disabled or partially disabled. You can choose a benefit period of two years, five years or up to age 65.
Premiums vary depending on which waiting period or benefit period you choose. Generally, the longer the waiting period and the shorter the benefit period, the lower the premium.
For claimants with a non-English speaking background who need assistance in making a claim, we can work with an interpreter from Translating and Interpreting Services (TIS) to help make the process easier to understand.
To ask for an interpreter, call us on 1300 803 745 between 8.30 am-4.30 pm Monday to Friday EST.
Use of TIS for insurance claims is free for all claimants, and our claims team can guide you through this process.
To find out more about Translating and Interpreting Services, visit tisnational.gov.au.
On 1 July 2017 Hostplus entered into an arrangement with MetLife that included a Premium Adjustment Mechanism (PAM) in respect of the Death and Total & Permanent Disability insurance cover and the non-default Income Protection cover. This arrangement reduces the insurer's risk exposure due to claims volatility and allows Hostplus to negotiate lower overall premiums for members.
Any premium adjustment payment made to us is allocated to a separate insurance reserve for this arrangement and is governed by our reserving policy. Our reserving policy requires that any premium adjustment payments we receive from the insurer are only passed-on to members through future premiums charged. The Hostplus Board will be exclusively responsible for approving the use and/or distribution of any of the PAM Proceeds and we will report details of any distribution of the PAM proceeds in our annual reports.
The PAM arrangement does not currently apply to default Income Protection (Salary Safe) cover referred to in section 8.17 of our PDS.