Inactive Super will lose Insurance benefits from July 1
Written and accurate as at: Apr 29, 2019 Current Stats & Facts
Insurance is a beneficial addition to a super account when it’s right for your circumstances.
New laws require super providers to cancel insurance inside super, once the account has been inactive for a continuous period of 16 months.
Why we’re doing this
Recently, the Federal Government introduced the Protecting Your Super package, designed to ensure that members are not paying for insurance cover that they do not know about or premiums that inappropriately diminish their retirement savings.
How this may affect you
If your Superannuation plan has not had recent contributions or rollovers, the insurance may be cancelled on or after 1 July 2019 unless you tell your superannuation provider not to, you make a contribution or rollover to this super account.
What you need to do
If you have Insurances inside your superannuation plan and know it is inactive you can either;
- Contact your super provider and say “I’d like to keep my insurance cover within my super account even if my account is or becomes inactive for a continuous period of 16 months.”
- Make a personal contribution to your superannuation plan before 1st July 2019
If you are not sure if you are at risk of losing your Insurance benefits please contact your superannuation provider and ask when the last contribution was received.
Some things to consider before deciding
- By doing nothing, you will lose this insurance cover or any ability to make a claim against this insurance cover.
- Where you have premiums paid in advance, you will be entitled to claim for the period you have already paid for, despite reaching 16 months of continuous inactivity during that period.
- You will no longer pay an insurance premium from this super account if your insurance is cancelled.
- By no longer having life insurance (also known as death cover), your dependants or other beneficiaries will not receive the insurance benefit inside this account if you die (as covered by your policy).
- By no longer having disability insurance, you will not receive any benefit if you become disabled due to illness or injury (as covered by your policy). Where you have premiums paid in advance, you will be entitled to claim for the period you have already paid for, despite reaching 16 months of continuous inactivity during that period.
- It can be complicated for certain people to get insurance cover. For example, if you have a pre-existing medical condition or are aged 60 or over, by cancelling your existing policy you may not be able to reinstate this cover (to the same benefit level) or get insurance elsewhere at the same premium.
- When considering the insurance that’s right for your circumstances, please check your most recent statement, product disclosure statement (PDS) or speak to your financial adviser. Product features, like waiting or benefit periods can vary between policies.
Please call the FMS Group team on 1300 982 499 if you have any questions about your Insurance inside your Superannuation plan.
