WARNING – DO NOT LOSE YOUR INSURANCE…
Today, superannuation funds all over Australia will start mailing their members about their insurance inside their superannuation accounts.
If you get one of these letters, DO NOT THROW IT AWAY, do not put it in the bottom draw, and
DO NOT IGNORE IT.
In March of this year, the Government passed the “Protecting your Superannuation” package, and regulations were finalised in late April.
So what does all this mean for you?
Generally, the new legislation prevents inactive members from maintaining any insurance cover within their account. The way around this is for you, the member to submit an election form to your superannuation fund. If you do not return the election form your insurance is likely to be cancelled.
What is an inactive account?
An inactive account has been classified by the Government as an account that has not received a contribution or a rollover for a period of 16 months or more. Put simply, if no new money has been put into your superannuation account in 16 months, it will be classed as inactive.
How could this affect you?
If you, and/or your financial adviser have kept a superannuation fund so that you can maintain insurance cover, and you don’t lodge an election, it is likely that your superannuation fund will have to cancel the insurance.
Personal insurance is hard to get and getting harder. If you have suffered any health impacts over your life, it is possible that you can no longer get full insurance cover. You may have to pay loadings, or even have parts of your cover excluded. These are all good reasons why an old policy (and an old super fund) may have been kept as part of your overall insurance plan. Remember this is all insurance within superannuation, including Total and Permanent Disability(TPD) insurance and Income Protection insurance.
But that’s not all…
If you are self-employed, a partner in a business, or recently changed jobs your account may easily become inactive, even though it is your main superannuation account.
If you wish to retain your insurance please follow the instructions that you will be getting mailed from your superannuation fund.
PLEASE DO NOT IGNORE MAIL FROM YOUR SUPERANNUATION FUND THIS MONTH