About insurance

Why include insurance with super?

Life can bring surprises and insurance should be considered as part of an individual’s financial plan, as a safety net for themselves and their family.  Insurance via employer super has several important benefits:

  • It allows your members to access group premium rates.
  • Since premiums are deducted from the account monthly, it means that premiums are paid for with pre-tax money. 
  • Insurance means that in the event of death or disablement, individuals and their family are more likely to be able to maintain their lifestyle without social security; the government encourages insurance to be attached to superannuation through tax concessions.  By having insurance with super, you effectively reduce the amount of contributions tax the individual would otherwise have to incur. 
  • Cover may be set up so that there is an automatic acceptance arrangement, which means that your members may not have to give medical evidence (provided your plan has a minimum number of members and other conditions are met).
  • In many cases, your member's cover can continue even after they cease employment with you.
  • Recent announcements from the Federal Government mean that Reasonable Benefit Limits (RBLs) are planned to be abolished from 1 July 2007, making super an even more attractive place to have insurance in the event a death benefit is paid out.  

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What types of cover are available?

BT Lifetime Super – Employer Plan

There are three types of cover available through the BT Lifetime Super – Employer Plan:

Death Only

In the event a member passes away, a lump sum payment is paid into their super account. Their super, incorporating the insurance, will be released and paid out to their estate (or beneficiaries). Death Only cover is available to all full time, part time and casual employees under age 65 (and can be renewed up to age 70). Members may apply to increase any existing death cover. 

Death and Total & Permanent Disability (TPD)

In the event a member passes away, a lump sum payment is paid into their super account.  Alternatively, in the event, it is determined, that the member can never return to their normal work duties* a lump sum payment will be paid into their super account. Their super, incorporating their insurance, will be released and paid out to their estate (or beneficiaries). 

Death and TPD is available to all permanent employees, who work 15 hours or more a week and are under age 65 (or under 70 where renewing). Members may choose to increase any existing Death & TPD cover. Depending on the amount chosen, they may or may not need to provide medical evidence. BT can guide members through this process.

Salary Continuance Insurance (SCI)

In the event the member is temporarily unable to return to their normal duties* for more than the specified waiting period of  30, 60 or 90 days, they can receive a monthly income payment. Payment is up to 75% of pre-disability income (to a maximum of $20,000 per month). The income benefit is paid for up to 24 months or until a TPD benefit is paid. Salary Continuance Insurance is available for all permanent employees under age 65 who work more than 25 hours a week.

* Full definitions for both Total & Permanent Disablement, and Total & Temporary Disablement (for Salary Continuance Insurance) are outlined in the Product Disclosure Statement, Part 2, Insurance Booklet.  The Insurance Booklet also contains definitions of ‘salary’, ‘pre-disability salary’, and provides a comprehensive guide as to when cover commences and ceases. 

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BT Business Super

There are three types of cover available through BT Business Super: 

Death Only

In the event a member passes away, a lump sum payment is paid into their super account. Their super, incorporating the insurance, will be released and paid out to their estate (or beneficiaries).  Death Only cover is available to all full time, part time and casual employees under age 65 (and can be renewed up to age 75).  Members may choose to increase any existing death cover. 

Death and Total & Permanent Disability (TPD)

In the event a member passes away, a lump sum payment is paid into their super account.  Alternatively, in the event, it is determined, that the member can never return to their normal work duties* a lump sum payment will be paid into their super account. Their super, incorporating their insurance, will be released and paid out to their estate (or beneficiaries). 

Death and TPD is available to all permanent employees, who work 20 hours or more a week and are under age 65.  Members may choose to increase any existing Death & TPD cover.  Depending on the amount chosen, they may or may not need to provide medical evidence.  BT can guide members through this process.

Salary Continuance Insurance (SCI)

In the event the member is temporarily unable to return to their normal duties* for more than the specified waiting period of  30 or 90 days, they can receive a monthly income payment.  Payment is up to 75% of  pre-disability income (to a maximum of $15,000 per month).  The income benefit is paid for up to 24 months or until a TPD benefit is paid.  Salary Continuance Insurance is available for all permanent employees under age 65 who work 20 hours a week or more.

* Full definitions for both Total & Permanent Disablement, and Total & Temporary Disablement (for Salary Continuance Insurance) are outlined in the Product Disclosure Statement, Part 2, Insurance Booklet.  The Insurance Booklet also contains definitions of ‘salary’, ‘pre-disability salary’, and provides a comprehensive guide as to when cover commences and ceases. 

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What are insurance categories?

As an employer, you may wish to have different insurance arrangements for different groups of employees. This is generally done when your business joins the BT Plan.  Employers may opt for different groups of employees to automatically have:

  • No cover
  • Death Only
  • Death and TPD or
  • Death, (with or without TPD) and SCI

Death and TPD cover formulae may vary across your membership if your plan has several different categories. Death and TPD may be based on the minimum Choice levels, a fixed dollar premium per week, a multiple of salary, or various formulae involving a percentage of salary and calculation of number of years of membership or years to age 65, and so forth.  Members can view their specific cover on their New Investor Statement or on their Annual Statement. 

Please note that if insurance is offered, your employees will have the ability to apply to increase their cover without employer consent (subject to acceptance by the insurer following satisfactory completion of medical evidence by the employee). Employer consent may be required if a member of the plan wishes to decrease or cancel their cover.

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What are Automatic Acceptance Limits (AALs)?

Automatic Acceptance Limits are thresholds whereby members can obtain insurance without evidence of health.  AALs are only available up to certain dollar limits of cover per member.  This limit usually increases with the size of the plan. 

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What level of insurance must be offered by an employer’s default plan?

Since July 2005, members of new employer plans must be offered a minimum amount of death cover (also referred to as “life insurance”) so that you comply with your obligations under Super Choice. This minimum level must be equivalent to either:

  • A premium of at least $0.50c per week for members under age 56 years, or
  • With at least the cover as tabled below:

Age range

Level of insurance cover

20 to 34

$50,000

35 to 39

$35,000

40 to 44

$20,000

45 to 49

$14,000

50 to 55

$7,000

BT and AIG will only offer cover under Automatic Acceptance Limit terms where the employer has nominated BT as the default fund for new members.  For plans not meeting this requirement all cover will be member discretion and subject to underwriting.

Plans established prior to 1 July 2005 will have until 20 June 2008 to comply with these requirements.

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What is the 120 days rule?

It is important to remember that if a new employee is eligible for Automatic Acceptance to send us their complete membership details within 120 days of them commencing employment, otherwise they will be required to be underwritten. The simplest and quickest way to do this is through BT Online Employer (BTOE). 

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