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Important information regarding insurance in super

Tuesday, April 30, 2019

New reforms 

Recently the government introduced new laws known as the “protecting your super package”. It is aimed at protecting members from paying for insurance cover with their super balance that they may not be aware of. However, it also captures members who may have retained their cover for genuine financial planning reasons. 

From 1 July 2019, these new laws require that super providers cancel insurance policies held inside of super if the account has been inactive for a period of 16 months, unless the member advises they do not wish this to occur.

How this can affect you

If you have a super fund that has insurance attached and you have not made a contribution or received a rollover the insurance maybe cancelled on or after 1 July 2019 unless you advise the super fund not to do so.

How can you ensure your insurance is not cancelled?

Make a contribution, roll funds over (this includes any policies externally funded and have an annual rollover to make the premium payment) and ensure in the future this occurs every 16 months as a minimum.

Alternatively, you need to notify your provider that you DO NOT WISH to have your insurance cancelled. It is important to note that your adviser cannot make this notification, it must come from you personally.

What do we suggest?

Member that will be impacted will be contacted by their super fund/insurer in the next few weeks. They will provide you with instruction on what is required to retain your cover if desired.

If you wish your cover to be cancelled, then you need do nothing. However please ensure that you do not require the cover, as once lost, depending on circumstances you may not be eligible for future cover. 

If in doubt contact your adviser to discuss your situation, if it’s been some time since you reviewed your cover and provider it may no longer be suitable. Your adviser can also provide you with the required documents to ensure if still relevant, this cover can be retained.  

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