I made the mistake of applying to join Netwealth (a Super provider). Unlike most Super providers, Netwealth do not offer the option to increase life / income cover to 6 units with limited insurance underwriting on joining. Netwealth’s insurers undertake full insurance underwriting and decided to impose restrictions on my cover (I’m not really sure why as I’m in good health with no serious medical history issues and have a good lifestyle). I now am no longer able to use the standard offerings from other super providers because they all ask if I have ever had cover declined or restricted.
I think that this is a serious failing in the market that should be tackled by the regulator. Why should the decision of one insurer cripple my options for life? I think that Netwealth should have warned me that applying to join them could be seriously damaging to my wealth.
You could do well to ring other funds to understand if and how they might restrict your cover because of the actions and policies of Netwealth.
Shopping for new car insurance I found a few years old not at fault claim resulted in one insurer making the premium 3X higher (eg they don’t want anyone’s business if they were in a prang in the last 5 years, but with others it had no effect, and a few a minor effect.
It could be ‘disclosure’ where they may not take on a high risk but have no worries for a low risk who was caught up in immovable policies, apparently as you were.
The phone is probably your best ‘weapon’ to check it out across the interesting funds if you have not done so and are relying on the forms. If you do, please let us know the responses.
Also consider insurance outside super. While it will be post-tax (rather than pre-tax in super), it still may be advantageous to consider and explore further.
True, with the PS that virtually every insurance application for every type of insurance asks the question about being previously restricted or denied. Going outside of super widens the pool of options but does not necessarily diminish the problem.
I’ve raised a complaint via Netwealth complaint process. Let’s see what they come back with. I will take it to AFCA if I don’t get a resolution. I think this is an issue that the regulator should be on top of. The basic principle of Super in Australia (as I understand it) is that people should be able to get a basic level of Death, TPD & IP cover with their Super without underwriting. I think that the insurers are trying to water this down and they need a firm hand to steer them back on track.
A recent ASIC report has found people claiming total and permanent disability (TPD) insurance for mental health conditions through their superannuation faced poor outcomes:
