Retirement
Do you have insurance in super? The rules are changing from 1 July
Savvy younger Australians are using their superannuation to cost-effectively insure themselves, but those with low balances need to act before 1 July to protect their cover.
Do you have insurance in super? The rules are changing from 1 July
Savvy younger Australians are using their superannuation to cost-effectively insure themselves, but those with low balances need to act before 1 July to protect their cover.
Superannuation policies offer members the potential benefit of life insurance, should they wish to have it included as part of their package.
However, new government regulations that come in from 1 July 2019 are removing this benefit if a superannuation account is inactive for a 16-month period - meaning it's had no contributions.
Given life insurance through superannuation is just shy of 70 per of Australians’ life insurance, the pending changes could have profound impact on unsuspecting Australians, NGS Super warned.
Laura Wright, CEO of NGS Super, believes it’s a big risk for even young Australians to not protect their future in case an unfortunate incident happens.
“Young people are highly vulnerable to workplace accidents and potentially total and permanent disability. So I think people really underestimate the value of having [life insurance],” said Ms Wright.
While the government is changing the regulations around superannuation in an effort to protect low balances, NGS super disagrees with the extent that fees are having on balances.
Instead, they suggest it helps clean up an industry that has not looked after itself.
“Quite clearly, the industry has taken a long time to come to grips with the need to clean up multiple accounts. Perhaps, if we as an industry had applied our minds to that earlier, the government wouldn’t have stepped in,” said Ms Wright.
“I personally think that insurance is a huge benefit. At the younger ages, it is incredibly cheap in most funds, so it is not as though it’s going to impinge as much as what is perhaps said in some of the illustrations that are used to show the erosions of balances,” said Ms Wright.
RELATED ARTICLES
About the author
About the author
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more
Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more
Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more
