Protecting Your Super Legislation and Mailout

Written by Ronald Pratap

on May 2, 2019

 Protecting Your Super package

Recently, the Federal Government introduced the Protecting Your Super legislation, designed (in theory) to ensure that members of Super funds(particularly those with low balances) are not paying for insurance cover that they do not know about or premiums that inappropriately diminish their retirement savings over time.

The biggest risk is that people who don’t hold Life insurance benefits elsewhere and don’t respond will lose the only insurance cover they have.

Applying for the cover again once this is cancelled will result in a application process in most circumstances which could become an issue if you have pre-existing medical problems.

 What does it all mean?

In a nutshell the ‘package’ says that any Super account, with Insurance in it, that hasn’t been active for a continuous period of 16 months, will have that insurance cancelled automatically, unless the member (you guys) tell the Super fund that you want to keep the cover in place to protect yourself.  You’ll then need to notify them every 12 months to do the same thing, if your fund has remained inactive for that period.   The cancellations take effect from 1st July 2019.

This may not affect all of you, but a large number of our clients have some form of insurance cover through a Super Fund that either doesn’t receive contributions into it, or hasn’t received a ‘top-up’ rollover into it, over the past 16 months.

Those that will be affected the most may include:

  • The self employed not contributing to their fund
  • The retired and those that still hold superannuation benefits
  • Mothers on extended maternity leave
  • Individuals who hold multiple super accounts
  • Individuals taking extended leave from the workforce

 

 What do you need to do?

So what you need to do now, will depend on the Super fund your insurance is with… some of them get you to confirm you want to keep the cover in place, even if you’ve got a regular rollover going into the fund to ‘top’ it up.  Some will only need you to confirm you want to keep the cover, if no activity has happened in the fund for 16 months.

When you get an email from one or more of your Super funds with a subject line like “Your ABC insurance will be switched off” or “Your insurance cover with ABC is about to be turned off”… you need to take the steps (as outlined in the email) to “Keep my cover” or any similar language they use. They will either require you to call, login or notify the fund that you would like to keep the cover. If you do not respond to your super provider, the insurances will be turned off.

Please make sure you take the steps to Protect yourself and keep your cover in place if needed…. Because if you don’t and it gets cancelled, you may not be able to put it back in place, if your circumstances have changed. 

Likewise if any of your family member or friends require assistance in this matter, please contact our office or check out the video which talks about this in a little detail.

If in doubt… send the emails to us and we’ll help you work through it and we can go through details in our Oran Park office located in the Macarthur region or we are able to service the wider Sydney region

Ronald Pratap

Principal Financial Planner at RP Wealth Management | Financial Planning l SMSF I Insurance l Property Advisory. Our purpose is to provide our clients with sound advice and direction to assist with their financial affairs and help them make the best choices in achieving what is important to them.

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