Speaking at a recent media briefing, CommInsure's executive manager for insurance tech and business delivery, Jeffrey Scott, said new insurance held inside super from July 1 this year will need to align with amendments to the SIS Act.
Mr Scott said there were significant changes implemented with the definition of total and permanent disability (TPD).
From 1 July 2014, the only definition that will be permitted will be the ‘any occupation’ definition, meaning the ‘own occupation’ definition of TPD will be prohibited from any new policies after July 1, Mr Scott said.
Following these changes, the bank has announced the launch of an insurance product designed for SMSF trustees.
“There are more than 960,000 SMSFs in Australia and less than 13 per cent have insurance,” Mr Scott said.
CommInsure stated that features of the SMSF Plan include life care, total and permanent disablement cover, accidental death and income protection.
Two of CommInsure’s products will also be changing – the ‘Total Care Plan Super’ and ‘Total Care Plan/Income Care Range’ policies issued to SMSFs.
For example, in reference to ‘Total Care Plan Super’, the CommInsure definition of ‘any occupation’ TPD presently allows for the insured to be treated as TPD even if they are able to generate an income of up to 25 per cent of their pre-disability earnings.
“This is currently inconsistent with the SIS definition of ‘permanent incapacity’ and we have removed it from the CommInsure definition,” CommInsure stated.