By James Fernyhough, Financial Standard
Industry fund Cbus has almost doubled its life insurance premiums, becoming the latest super fund to do so in response to a spike in claims.
Following renegotiations with group insurer Hannover Life Re of Australasia, Cbus members on the default option will now be paying $14.30 a week, compared with $7.80 previously. They will be getting the same death and total and permanent disability (TPD) cover.
Cbus members are largely in the construction and related industries, putting them in the high risk insurance category.
Calling the increase “unavoidable”, Cbus chief executive David Atkin said: “Cbus members work in some of the toughest conditions of any industry and that is why maintaining levels of cover for our members and their families is essential.
“We have provided life insurance since inception of the fund in 1984 and, shortly after, TPD access to members in occupations deemed ‘high risk’. For many of these members and their families insurance would have been beyond their reach. We have paid in excess of $1 billion in insurance benefits over that time.
“TPD claims and payments have risen significantly over recent years, from $40 million in 2010/11 to a forecast $90 million this year. While this has impacted the cost of insurance it has provided valuable support for members who have become seriously ill or injured,” he said.
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