Retirement
Why your insurance in superannuation could be at risk from July
Policyholders are being warned to be across the details and fine print of their superannuation account before 1 July to ensure they don’t lose their insurance.
Why your insurance in superannuation could be at risk from July
Policyholders are being warned to be across the details and fine print of their superannuation account before 1 July to ensure they don’t lose their insurance.
From 1 July this year, superannuation funds will be required to cancel insurance cover within accounts if the account is deemed to be inactive.
This is a consumer protection measure under the Protecting Your Super reforms, but it could also have the unintended consequence of Australians losing out on insurance policies they thought they held.
The changes will affect accounts that are inactive for 16 consecutive months, unless the member contacts the super fund and elects to keep their insurance or make a contribution to the account.
Steps you should take
Slater and Gordon’s superannuation principal lawyer, Annemarie Gambera, said all super holders need to be informed so they can take appropriate action.
“This is especially the case for anyone with multiple super accounts. An account is inactive if it has received no financial contributions for 16 months or more,” said Ms Gambera.
“We are advising clients to be aware of the upcoming changes and to ensure they understand that the super insurance policies in each of their accounts might offer different benefits, so it’s best to check what qualifications and criteria they’ll need to meet to access the insurance,” said Ms Gambera.
Slater and Gordon’s superannuation senior associate, James Hunter, believes the consequences could be catastrophic if the holder of the account becomes injured, ill or loses income from not being able to work.
Other changes in the works
Part of the new scheme includes plans to cap fees to 3 per cent for account balances that are less than $6,000 dollars, in an effort to stop them being eroded by high fees.
“It’s important that people get in touch with their super fund, understand their rights and check if their working situation still allows them to meet the criteria and requirements to receive the insurance provided by their fund,” Mr Hunter said.
“Make sure that if you are employed, your super fund is receiving regular contributions and that you are across what the insurance provided by your fund actually offers you,” Mr Hunter said.
This email address is being protected from spambots. You need JavaScript enabled to view it.
About the author
About the author
Superannuation
Australia slips in global pension index
The Australian superannuation system has been rated at B, falling to fourth place, new research has revealed. ...Read more
Superannuation
Early super payments slow to under $200m
Less than $200 million was paid out of the super system in the second week of October, as the popularity of the government’s early release scheme looks to be slowing further following the release of...Read more
Superannuation
‘Impressive’ super erases most COVID-19 losses
Australian superannuation has erased most of the COVID-19 downturn following a positive September quarter, new research has shown. ...Read more
Superannuation
1.2m Australians lose in tax offset lag
The Treasury’s latest tax cuts will see more than 1.2 million low-income earners paying a higher rate of tax on their superannuation contributions, with funds arguing changing the tax rate could add...Read more
Superannuation
Could you be stuck in a poor-performing fund?
The government’s superannuation reforms to eliminate multiple superannuation accounts could have unintended consequences, with older Australians locked into financial decisions made by their teenage...Read more
Superannuation
Big super pushes for gender parity
One of Australia’s largest superannuation funds has launched an investor-led initiative that will see women fill at least 40 per cent of the executive roles in the ASX 200 over the next decade. ...Read more
Superannuation
Why it is ‘cruel’ and ‘embarrassing’ not to raise the SG
Australian workers, who are bearing the brunt of the public decision to shut down the economy, could be “cruelly rewarded” for their sacrifice with a less dignified retirement, industry experts ...Read more
Superannuation
A short-term fix: Lack of strategy behind super withdrawals
A large proportion of Australians who have withdrawn their super early as a result of financial hardship have not even stopped to consider how it will impact their savings at retirement. ...Read more
Superannuation
Australia slips in global pension index
The Australian superannuation system has been rated at B, falling to fourth place, new research has revealed. ...Read more
Superannuation
Early super payments slow to under $200m
Less than $200 million was paid out of the super system in the second week of October, as the popularity of the government’s early release scheme looks to be slowing further following the release of...Read more
Superannuation
‘Impressive’ super erases most COVID-19 losses
Australian superannuation has erased most of the COVID-19 downturn following a positive September quarter, new research has shown. ...Read more
Superannuation
1.2m Australians lose in tax offset lag
The Treasury’s latest tax cuts will see more than 1.2 million low-income earners paying a higher rate of tax on their superannuation contributions, with funds arguing changing the tax rate could add...Read more
Superannuation
Could you be stuck in a poor-performing fund?
The government’s superannuation reforms to eliminate multiple superannuation accounts could have unintended consequences, with older Australians locked into financial decisions made by their teenage...Read more
Superannuation
Big super pushes for gender parity
One of Australia’s largest superannuation funds has launched an investor-led initiative that will see women fill at least 40 per cent of the executive roles in the ASX 200 over the next decade. ...Read more
Superannuation
Why it is ‘cruel’ and ‘embarrassing’ not to raise the SG
Australian workers, who are bearing the brunt of the public decision to shut down the economy, could be “cruelly rewarded” for their sacrifice with a less dignified retirement, industry experts ...Read more
Superannuation
A short-term fix: Lack of strategy behind super withdrawals
A large proportion of Australians who have withdrawn their super early as a result of financial hardship have not even stopped to consider how it will impact their savings at retirement. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
