HESTA cuts new deal with AIA Australia, cuts fees

Mike Taylor

Managing Editor and Publisher

8 May 2026

Barely three months out from the next superannuation performance test, big health industry fund, HESTA, has dropped insurance fees by an average of 12%.

The fund announced it had dropped fees across all insurance cover types and said the changes, due to take effect later this year, are part of a broader suite of changes designed to provide more accessible cover.

The fee changes will come into effect in July, with the Australian Prudential Regulation Authority (APRA) scheduled to announce the results of the 2026 performance in August.

The fund said the changes will see average fee decreases of around 6% for death cover and nearly 15% for TPD, with income protection average reductions ranging from 1.4% to 23.5% depending on benefit period.

The fee changes flow from HESTA’s renewal of its long-standing group insurance relationship with AIA Australia.

Commenting on the fee cuts, HESTA chief executive, Debby Blakey described keeping insurance costs down and enhancing protections as a “fantastic outcome for our members who are feeling the impact of higher cost-of-living pressures”.

As well as reduced insurance fees, the July changes mean HESTA members on parental leave will be able to maintain their cover without paying insurance fees for a full 12 months, with this extending to 24 months for a member whose baby is born prematurely.

The Fund is also removing the automatic exclusion of disabilities related to normal pregnancy or childbirth or miscarriage, from income protection claims in specified circumstances. This is currently a common industry exclusion.

It said the July changes build on the November 2025 uplifts made in partnership with AIA Australia to improve the digital insurance claims experience for HESTA members.

HESTA outlined the changes as being:

• Reduced insurance fees: all insured HESTA members will get an insurance fee reduction for death, total and permanent disablement and income protection cover. The fee reduction amount will vary for each member and depend on a range of factors.
• Extended parental leave insurance waiver: while on parental leave, insurance cover can continue without fees for a full 12 months. For premature births (before 37 weeks) this will be extended to 24 months.
• Pregnancy-related disability changes: the automatic exclusion from income protection claims of disabilities related to normal pregnancy or childbirth, or miscarriage, will no longer apply in specified circumstances.
• Non-lapsing binding death benefit nominations: HESTA members will be able to make non-lapsing binding death benefit nominations from 1 July 2026.
• The minimum new events cover timeframe is reducing: new events cover will generally apply until 10 consecutive days of active employment, down from 30 days.
• Easier to apply for cover: members will be able to apply for increased death (up to a total of 6 units) and income protection (up to a total of 12 units) cover at any time by completing a short personal health statement.