What is default insurance cover?
Default insurance cover is automatically applied to your account, requiring no medical history or financial details from you. You start with a certain level of coverage based on age, paying a premium without the detailed paperwork. This coverage changes as you age, generally reducing after your thirties.
Eligibility for default insurance cover
Not everyone automatically qualifies for default insurance cover. Under the Putting Members' Interests First (PMIF) legislation, effective April 1 2020, certain conditions, like being under 25 or having an account balance below $6,000, affect immediate eligibility. legalsuper can automatically provide you with default cover once you meet the PMIF requirements. However, you can opt in early under specific conditions.
Your eligibility for insurance coverage under the policy will be checked when you lodge a claim.
Can you opt-in for default insurance if you're not eligible?
Yes, you can opt-in. If you're under 25 or your account balance is less than $6,000, you can still request default insurance coverage by opting in early.
How to opt-in early:
To make an early election for default insurance cover, ensure the following eligibility conditions are met:
- Submit a Valid Early Election form: Your early election form must be completed to the insurer's satisfaction and received by us within 60 days from the date mentioned in your welcome letter.
- Receive a Superannuation Guarantee (SG) Contribution: An SG contribution must be credited to your account.
- Sufficient account balance: Your account balance should be enough to cover at least one month of insurance fees. The start of cover is determined by whichever date is later: when your early election form is received, or your first SG contribution has been recorded since joining legalsuper.
Meeting the conditions:
If you fulfil these eligibility conditions, your account will be granted default insurance coverage.
If you don't meet the conditions:
Should you not meet these requirements, default insurance cover cannot be provided right now.
To apply for coverage in the future, you'll need to go through underwriting, which involves submitting health and medical evidence to the insurer. Alternatively, if eligible, you can wait until you meet the PMIF (Putting Members' Interests First) criteria to be automatically provided with default insurance cover.
Eligibility check at claim time:
Remember, your eligibility for insurance cover under the policy will be verified when you lodge a claim.
Your default insurance questions answered
If you weren't eligible for default insurance when you first joined or re-joined legalsuper but later meet the eligibility criteria (i.e., your account balance exceeds $6,000 and you are at least 25 years old), default insurance cover will be automatically applied to your account.
You can cancel your insurance cover at any time. You can do this in writing (including email) or over the phone. The cancellation will take effect from the date we receive your request or any later date you specify.
If you decide to reinstate your insurance coverage after cancellation, you must reapply for cover. This process involves providing medical and other relevant evidence to the insurer.
Default Employer-sponsored cover Insurance fees and costs
Monthly deductions:
Insurance fees are automatically deducted from your account on the last Friday of each month. While this method can be tax-effective and convenient, it's important to note that it might reduce your overall superannuation balance.
Cancelling Insurance cover:
You have the flexibility to cancel your default insurance cover at any point. To do so, simply submit a cancellation request.
Insufficient funds:
If your account doesn’t have enough funds to cover the insurance fees on the last Friday of the month, your insurance cover will be terminated.
Calculate your default Employer-sponsored Insurance cover
Our default insurance cover calculator is a straightforward tool that helps you estimate your default insurance cover costs based on your age. It will guide you through calculating the costs associated with your insurance cover, to help you make an informed decision about your insurance.
Your default Employer Insurance fees and costs questions answered
- Yes, where eligible for cover, you do. Insurance fees are automatically deducted from your legalsuper account balance. The cost of your insurance is directly related to the amount of cover you hold.
- Varied costs: The cost for default insurance cover varies and is calculated on a weekly unit fee basis. This fee depends on your age and the type of cover you are provided with, which can be either:
- Death (including Terminal Illness) and Total & Permanent Disablement (TPD) cover, or
- Death Only cover (including Terminal Illness).
- Age-Based Units: Your age determines the number of insurance units you're entitled to. Insurance fees are deducted from your account on the last Friday of every month.
- Insufficient funds: If your account does not have enough funds to cover the insurance fees, your insurance cover will cease.
- Coverage details: Default insurance covers Death (including Terminal Illness) and TPD. The extent of your cover is determined by your eligibility criteria and age when you receive the default insurance cover.
- Before your 25th birthday: You are covered for 2 units.
- On or after your 25th birthday: You receive 4 units of cover.
Overview of Default Insurance cover: Standard vs. Limited
When you're part of legalsuper as an Employer-sponsored member, your default insurance cover falls into one of two categories: Standard Cover or Limited Cover. Your actions and circumstances determine the type of cover you receive after joining or re-joining legalsuper.
Standard Cover
- Eligibility for Standard Cover: You'll receive Standard Cover if you make an early election, meet the Eligibility Conditions, and your first Superannuation Guarantee (SG) contribution is received within 120 days of joining or re-joining legalsuper.
- Coverage details: Standard Cover can offer comprehensive protection against illness or injury without limitations on when the illness or injury becomes apparent.
Limited Cover
- Transition to Limited Cover: If your first SG contribution is received after 120 days of joining or re-joining date, you'll receive Limited Cover instead. Similarly, if you don't make an early election, the default insurance cover you're provided with will be Limited Cover.
- What Limited Cover entails: Limited Cover specifically provides you with Death Cover and New Events Total and Permanent Disability (TPD) Cover. This means you're only covered for TPD resulting from an illness that manifests or an injury that occurs after your cover has commenced or been reinstated under the policy.
- Duration and conversion: Limited Cover is in place for at least 12 consecutive months from when your cover starts. It can be converted to Standard Cover after you have been actively working for 30 consecutive days immediately before the 12-month period ends. If you're not “at work” for this duration, Limited Cover will continue until you meet this condition.
Need more information?
For a comprehensive understanding of which insurance cover—Standard or Limited—applies to you, and to learn about the commencement of default insurance cover, please consult our detailed document:
Employer-Sponsored Super & Personal Super Additional Information
This resource provides in-depth explanations and guidelines to help you navigate your insurance options and understand the specifics of your coverage start date.
Need more help? Contact our Client Services team
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