Sunsuper and QSuper merged on 28 February 2022 to create Australian Retirement Trust. Existing members of Sunsuper will remain part of the Australian Retirement Trust, and the superannuation investment products and Sunsuper’s controversial TPD Assist Policy will remain the same.
Background
As of 28 February 2022, we saw the merge of Sunsuper and QSuper into Australian Retirement Trust. Whilst Sunsuper is now actively known as Australian Retirement Trust, QSuper is running as a sub-branch “part of Australian Retirement Trust”.
Sunsuper was becoming unfavourably known for its “TPD Assist” policy. It pays out total, and permanent disablement (TPD) claims over six years in circumstances where an individual could not return to work. Under limited conditions, the policy would pay a lump sum. However, to meet the lump sum criteria, an individual’s condition had to be very severe, and the criteria were almost impossible to meet for most claimants.
Suppose you held an account with Sunsuper that has transitioned to Australian Retirement Trust. In that case, it is essential to know that Sunsuper’s TPD Assist policy has essentially carried over to the Australian Retirement Trust. That means, whilst you may be insured for a significant amount, this might not be the amount you would receive in case of a TPD claim.
The TPD Assist Policy
Under the TPD Assist policy (for injuries that occurred after 1 October 2020), if you meet the usual “unable to return to work” definition, payments are structured as follows:
(i) 25% at the Date of Lodgement
(ii) 15% at the first New Assessment Date
(iii) 15% at the second New Assessment Date
(iv) 15% at the third New Assessment Date
(v) 15% at the fourth New Assessment Date
(vi) 15% at the fifth New Assessment Date
If your insured amount was $200,000 and you were successfully deemed as TPD, your first instalment would be $50,000.00 (being 25%), and the remaining five payments would be $30,000.00 (being 15%), providing you continue to meet the required definition on each annual review. These figures are also subject to tax upon withdrawal from your super account.
We foresee this TPD Assist policy becoming an issue with clients who assume that if they are covered for a set amount, that is the amount they will receive as a lump sum payment on a successful claim. Knowing what your policy covers and any conditions that apply are imperative. Whilst it is advertised on the Australian Retirement Trust’s website, many clients are caught off guard and unaware of the TPD Assist payment schedule. Obtaining standard lump sum TPD coverage with Australian Retirement Trust is an option. However, this requires an application and medical underwriting.
Reviewing your TPD insurance regularly is essential to ensure it meets your ongoing financial needs. Before cancelling or merging super funds, it is vital to review your insurance to ensure no negative consequences (such as pre-existing conditions clauses etc.). We strongly recommend seeking the services of a financial planner when taking out or making any changes to your superannuation or life insurance products.
TPD Assist policy and the importance of a financial advisor
The insurance world can be complicated and daunting, particularly when you need to claim. With so many different products on the market, all with different definitions and conditions – it can be a confronting experience. Having TPD Insurance is a great place to start.
Understanding your cover and its benefits is even better. TPD Insurance pays a benefit when you are Totally and Permanently Disabled, which can mean many different things. This type of insurance is there to provide you with funds should you be unable to work again, allowing you and your loved ones to maintain your lifestyle.
It sounds simple. Unfortunately, TPD Insurance claims are often incredibly complex and have significant requirements to be met for a claim to succeed. It is a process where things can go wrong through no fault of your own or the insurer, and having an adviser and legal representative by your side can ensure that things stay on track. When you are in poor health and grappling with a new way of life, leave your claim to the experts that do this all day, every day.
Vogue Advisory Group– we are experts in superannuation
If you need insurance advice and require assistance, we are here to help. Please don’t hesitate to contact us at any time.
