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 elevates tech leadership with strategic appointment of Richard Exton
Aware Super, one of Australia's largest industry super funds, has announced a pivotal appointment to its executive team, underscoring the growing importance of technology, data, and artificial ...Read more
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
Superannuation
Aware Super elevates tech leadership with strategic appointment of Richard Exton
Aware Super, one of Australia's largest industry super funds, has announced a pivotal appointment to its executive team, underscoring the growing importance of technology, data, and artificial ...Read more
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
