We're 13 months on from the launch of REST's insurance offering and it seems to have been well received by REST fund members, with the vast majority of people happy to have it as part of their super package, and some excellent feedback from the employers we deal with.
The latest change to the product occurred on 1 January 2010 with the recent indexation by 5 per cent of the basic cover benefits. This has provided members with an automatic increase in cover without medical evidence. This will continue to occur annually and will ensure the benefit keeps up with the cost of living.
When REST introduced its insurance offerings in conjunction with AIA Australia, we did it with the knowledge that many of our members, particularly those individuals who worked on a casual and part-time basis, were finding it difficult to obtain automatic insurance cover, particularly income protection. And those who were eligible had little understanding of what type or level of insurance they required.
After a significant amount of analysis, REST elected to introduce realistic needs-based cover that was designed around member needs rather than a fixed premium cost, and was presented in a flexible default package comprised of death, total and permanent disablement (TPD) and long-term income protection (IP) cover.
The new design was tailored specifically for REST members, with the level of cover automatically changing to suit their needs as they move through each stage in life. In short, it was a default package of cover which automatically changes as life needs adapt, but with the flexibility to increase, reduce or cancel each component of the cover.
For instance, an 18 year-old might not have a pressing need for IP, TPD or life cover, and choose to opt out from the standard REST cover. However, the same person, aged 25 and with greater responsibilities, would have far different requirements from their insurance. In line with this, we ensure that REST members approaching age 25 automatically get basic IP, TPD and life cover reinstated if they don't already have it.
The feedback from members on this lifestyle cover has been positive and we've experienced a very low number of members choosing to opt out.
The launch of this package has meant that for the first time almost a million Australians have benefited from life cover tailored to suit their stage in life.
We are continuing to work hard in educating our members about the need to make sure they are covered, and covered appropriately.
Damian Hill is the CEO of REST. This material has been prepared without taking into account your objectives, financial situation or needs. Before making a decision based on this material, you should consider the product disclosure statement which is available from our website at www.rest.com.au or by calling 1300 300 778. When you become a member of REST Superannuation, you join the Retail Employees Superannuation Trust ABN 62 653 671 394. The trustee is Retail Employees Superannuation Pty Ltd ABN 39 001 987 739, AFSL 240003.
