CommInsure, an insurance arm of The Commonwealth Bank of Australia, is set to introduce a life insurance product for the members of self-managed superannuation funds (SMSFs).
The new product is an updated version of its Total Care Plan Super product, which has been upgraded to comply with the upcoming Superannuation Industry (Supervision) Act (SIS Act).
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To be launched on 11 May 2014, the new product’s prime feature is Split TPD, where policyholders will be provided with total and permanent disability (TPD) cover through their SMSF with the associated tax advantages.
CommInsure executive manager of insurance tech and business Jeffrey Scott said that the product takes care of difficult compliance issues for advisers.
"From 1 July 2014, the only definition that will be permitted will be the ‘any occupation’ definition, that says a person due to an injury or illness will be unlikely ever to engage in gainful employment based on their education, training or experience," added Scott.
The SIS act has changed the conditions of release for total and permanent disability (TPD) claims, wherein a claimant could be eligible if he or she was unable to continue with any occupation, as against the previous rule of own occupation.
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By GlobalDataAdditionally, consumers, who meet with an injury and are not employed, will not be able to claim income replacement under the new rule.
With this new service, CommInsure is intending to tap the highly potential virgin market citing that only 13% of 1 million Australian SMSF members are uninsured through their SMSF.
