Super fund trustees should evaluate their default disability cover in the wake of the Australian Prudential Regulation Authority (APRA) new standards according to TAL.
Speaking at the Association of Superannuation Funds of Australia's (ASFA's) National Conference yesterday, TAL Group Life head of product and pricing, Darren Wickham, said that in light of APRA's revised Prudential Standard for Superannuation 250 (SPS250), trustees should review the disability coverage in their life insurance policies.
"The unfortunate reality is the financial needs of a family living with disability are often greater than for a family who has suffered from a death," Mr Wickham said.
"Yet many super fund insurance benefits are the same for both death and disability - despite different needs."
Under APRA's SPS250, trustees will need to develop a life insurance strategy for their fund, and to consider whether the insurance cover offered to members is appropriate.
Mr Wickham said he was concerned with the focus on lump sum total and permanent disability benefits, rather than income-type benefits within most funds.
He said it was important trustees reviewed whether the level and types of insurance within default life insurance was meeting the needs of clients.
APRA's original proposal for regulatory reform was set out in its September 2011 discussion paper.
The majority of Prudential Standards provisions will take effect from 1 July 2013, with reporting commencing in 2013 for periods ending on or after 1 January 2013.
