LUCRF Superannuation and AustralianSuper completed a merge in 2022. This article is an update to our previous article prior to the merger, “LUCRF Super and AustralianSuper merger”. After the merge, LUCRF members became members of AustralianSuper. One important aspect of the merger was the question of what insurance benefits, like TPD and income protection, a LUCRF member would receive after the merger.
TPD and income protection insurance in super
Most super funds offer default Total and Permanent Disability (TPD) Insurance and Death insurance. Some super funds also offer income protection insurance. As we have discussed in previous articles, if you can’t work due to an injury or sickness, including mental illness, physical illness or any medical conditions, then you may be entitled to claim income protection or TPD insurance through your superannuation fund.
When a merger of two superannuation funds occurs, it’s very important that members understand any changes which arise as a result of the merger because sometimes a merger can have a significant impact on your disability insurance entitlements. Sometimes for the better, sometimes for the worse.
Changes to disability insurance for LUCRF members after the merger
Changes were made to the insurance provided to LUCRF members when they became AustralianSuper members, and those changes which happened during the merger could affect individual claims.
Specifically, after the merger, the insurance cover for LUCRF members was provided by a different insurer, TAL Life. Prior to the merger, the insurance cover was provided by Onepath Life (now Zurich).
Under the new insurance arrangements with AustralianSuper, your level of TPD insurance depended on a couple of things. If, prior to the merger, you had a level of insurance with LUCRF that was lower than the age-based insurance (insurance where the amount of cover changes as you age) with AustralianSuper, then your new insurance cover (the amount you would be paid in the event of a TPD claim) should have increased to the default age-based level of insurance cover that AustralianSuper offered.
You can learn more about the differences between these TPD insurance types, in our blog, "Age-based vs fixed cover TPD insurance".
If you had a level of default TPD insurance cover through LUCRF that was higher than the default insurance with Australian Super, then you would receive the default level of TPD insurance with AustralianSuper and have your insurance cover matched (rounded to the nearest $1,000) with extra fixed cover with AustralianSuper.
If you had a fixed level of TPD cover with LUCRF before the merger, then you would receive the same fixed level of cover with AustralianSuper.
Default age-based income protection may have been applied for some LUCRF members
Importantly, if you did not have income protection with LUCRF superannuation prior to the merger, depending on your circumstances, you may have received automatic/default age-based income protection insurance.
If you want to increase your level of income protection insurance, then you can apply to increase it, but if you do that, you will probably need to go through an underwriting process where you will need to disclose any pre-existing medical conditions which you had and the insurer will need to consider the terms, if any, that they are prepared to insure you on.
TPD or income protection claims at the time of the merger
As you can see from the above, sometimes how your level of insurance cover works can be complicated. In addition, if you stopped work on or around the time of the merger, in June 2022, then there may be a question about which insurer (Zurich or TAL) is now responsible for your TPD or income protection claim. In our experience when those issues arise, it can cause significant delay and complexity in the claims.
In recent times we have seen a number of former LUCRF members who have had some difficulties in obtaining details about the insurance cover they had prior to the merger. The trustee of the super fund and the insurer have obligations to ensure that you are provided with information about your rights and entitlements.
Get help from a TPD lawyer
If you’ve had any trouble getting access to your information, or if you have a TPD or income protection claim with AustralianSuper or LUCRF, we recommend you make contact so that we can obtain, check and confirm your entitlements.
Berrill & Watson Lawyers are a leading superannuation and insurance law firm and understand the questions to ask and the claims process better than anyone. If you need help, don’t hesitate to call us.
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