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Insurance improvements
On 1 March 2010, the PSSap improved your insurance so it now keeps up with you. For some members this means that you now have more cover, and for others it means you have the same level of cover but at a lower cost. We also made improvements to the PSSap income protection insurance.
| Death and TPD | Income protection | |
|---|---|---|
| Level of cover | Basic death and TPD cover (the amount of cover you automatically get) now varies (and changes automatically) depending on your age. We’ve done this because the amount of cover a person needs generally depends on their age. | The level of cover remains the same. It is automatically set at 75 per cent of base annual salary or up to $20,000 per month. The automatic acceptance limit is $12,000 per month and members will require underwriting up to a maximum of $20,000 per month. The level of cover or waiting period can still be changed. Members can also opt out of income protection altogether. |
| Premium reduction | Overall premiums have reduced by 12 per cent. However, some members may now have more cover so the dollar cost of their premium may not have reduced. | Overall premiums have reduced by 12 per cent. However, some members may now have more cover so the dollar cost of their premium may not have reduced. |
| Maximum cover | Has increased to: – $50 million death benefit – $3 million TPD benefit |
The maximum cover is $20,000. The automatic acceptance limit has also increased from $10,000 to $12,000. |
| Other changes | Basic default cover is now available to all members, regardless of your employment status. | There is the option to now choose additional waiting periods of 120 days or 180 days. |
Case studies
These case studies show what changes happened to various member’s insurance arrangements when we changed the PSSap insurance on 1 March 2010. Click on a heading to display more information.
Age 18 – 24
Emily Sayer is a PSSap member who is casually employed. She’s turning 22 on her next birthday.
| Cover | Premium (monthly) | Emily has the same level of cover for $0.48 LESS a month. | |
|---|---|---|---|
| Old insurance | $205,000 | $8.00 | |
| Premium reduction | $205,000 (now Fixed cover) | $7.52 |
Under previous insurance arrangements, Emily has cover worth $205,000 under the ‘unit of cover’ benefit design. Her weekly premium was $2.
Under the new insurance arrangements, Emily’s $205,000 worth of cover becomes fixed and is now called Fixed cover and stays at this level until age 60 when TPD reduces automatically. As Emily is turning 22 next birthday, her new monthly premium is $7.52.
Blake Wood is a PSSap member who earns $35,000 a year and is 23 years old.
|
Cover | Premium (monthly) | Blake has the same level of cover for $1.28 LESS a month. |
|---|---|---|---|
| Old insurance | $220,500 | $9.37 | |
| Premium reduction | $220,500 (now Fixed cover) | $8.09 |
Under previous insurance arrangements, Blake has $220,500 worth of cover, calculated by 15% × salary × years to 65. His monthly premium was $9.37.
Under the new insurance arrangements, he would have $150,000 worth of cover. As his previous cover ($220,500) is higher, he keeps this level of cover which becomes Fixed cover and stays at this level until age 60 when TPD reduces automatically. Blake’s new monthly premium is $8.09.
Age 26 – 44
Rebecca Jones is a PSSap member who earns $70,000 a year and is 32 years old.
| Cover | Premium (monthly) | Rebecca has the same level of cover for $2.59 LESS a month. | |
|---|---|---|---|
| Old insurance | $346,500 | $17.61 | |
| Premium reduction | $346,500 (now Fixed cover) | $15.02 |
Under previous insurance arrangements, Rebecca has $346,500 worth of cover, calculated by 15% × salary × years to 65. Her monthly premium was $17.61.
Under the new insurance arrangements, she would have $250,000 worth of cover. As her previous cover ($346,500) is higher, she keeps this level of cover which becomes Fixed cover and stays at this level until age 60 when TPD reduces automatically. Rebecca’s new monthly premium is $15.02.
John Smith is a PSSap member who earns $50,000 a year and is 40 years old.
| Cover | Premium (monthly) | John has $62,500 MORE cover for only $2.55 more a month. | |
|---|---|---|---|
| Old insurance | $187,500 | $17.03 | |
| Premium reduction | $250,000 (now Fixed cover) | $19.58 |
Under previous insurance arrangements, John has $187,500 worth of cover, calculated by 15% × salary × years to 65. His monthly premium was $17.03.
Under the new insurance arrangements, he would have $250,000 worth of cover. As this new level of cover is higher than his previous cover ($187,500) John will automatically get $250,000 worth of DTPD cover, known as Basic cover. This amount of cover will change automatically with John’s age. John’s new monthly premium is $19.58.
Jane Robbins is a PSSap member who turns 41 next birthday and is casually employed.
| Cover | Premium (monthly) | Jane has the same level of cover for $0.52 LESS a month. | |
|---|---|---|---|
| Old insurance | $95,500 | $8.00 | |
| Premium reduction | $95,500 (now Fixed cover) | $7.48 |
Under the previous insurance arrangements, Jane had $95,500 worth of cover under the ‘unit of cover’ benefit design. Her weekly premium was $2.
Under the new insurance arrangements, as Jane is casually employed, her $95,500 worth of cover will become Fixed cover and stays at this level until age 60 when TPD reduces automatically. The new aged based premiums will apply. Jane’s new monthly premium is $7.48.
Age 45 – 54
Shane Goode is a PSSap member who is casually employed. He turns 47 on his next birthday.
| Cover | Premium (monthly) | Shane has the same level of cover for $0.52 LESS a month. | |
|---|---|---|---|
| Old insurance | $51,000 | $8.00 | |
| Premium reduction | $51,000 (now Fixed cover) | $7.48 |
Under the previous insurance arrangements, Shane had $51,000 worth of cover under the ‘unit of cover’ benefit design. His weekly premium was $2.
Under the new insurance arrangements, as Shane is casually employed, his $51,000 worth of cover will become Fixed cover and stays at this level until age 60 when TPD reduces automatically. The new aged based premiums will apply. Shane’s new monthly premium is $7.48.
Anne Dance is a PSSap member who earns $65,000 a year and is 52 years old.
| Cover | Premium (monthly) | Anne has $7,000 MORE cover for $3.83 LESS a month. | |
|---|---|---|---|
| Old insurance | $126,500 | $40.88 | |
| Premium reduction | $133,500 (Basic scale cover) | $37.05 |
Under the previous insurance arrangements, Anne has $126,750 worth of cover, calculated by 15% × salary × years to 65. Her monthly premium was $40.88.
Under the new insurance arrangements, she would have $133,500 worth of cover. As this new cover is higher than her previous level of cover ($126,750) Anne will automatically get $133,500 worth of DTPD cover, known as Basic cover. This amount of cover will change automatically with Anne’s age.
Anne’s new monthly premium is $37.05.
Age 55+
Trevor Percy is a PSSap member who earns $150,000 a year and is 55 years old.
| Cover | Premium (monthly) | Trevor has the same level of cover for $13.50 LESS a month. | |
|---|---|---|---|
| Old insurance | $225,000 | $96.94 | |
| Premium reduction | $225,000 (now Fixed cover) | $83.44 |
Under the previous insurance arrangements, Trevor had $225,000 worth of cover, calculated by 15% × salary × years to 65. His monthly premium was $96.94.
Under the new insurance arrangements, he would have $97,500 worth of cover. As his existing cover ($225,000) is higher, he keeps his previous level of cover which becomes Fixed cover and stays at this level until age 60 when TPD reduces automatically. Trevor’s new monthly premium is $83.44.
Jennifer Jeffrey is a PSSap member aged 61 who earns $21,000.
| Cover | Premium (monthly) | Jennifer has $22,900 MORE cover for only $12.89 more a month. | |
|---|---|---|---|
| Old insurance | $12,600 | $9.03 | |
| Premium reduction | $35,500 (Basic scale cover) | $21.92 |
Under the previous insurance arrangements, Jennifer has $12,600 worth of cover, calculated using the sum insured design of 15% × salary × years to 65. Her monthly premium was $9.03.
Under the new insurance arrangements, she would have $35,500 worth of cover. As this new cover is higher than her previous level of cover ($12,600) Jennifer will automatically get $35,500 worth of DTPD cover, known as Basic cover. This amount will change automatically with Jennifer’s age. Jennifer’s new monthly premium is $21.92.