With everything happening with Covid-19, there are some other legislation changes taking effect on April 1 that haven’t been widely publicised and could impact you. These changes may affect your insurances within superannuation. If you have set up insurance recently with us, it is likely that it won’t be affected. However older policies or older funds could be affected. Please see below for further details.

From 1 April 2020, the Government’s Putting Members’ Interests First reforms will require insurance in superannuation for certain members only be offered on an opt-in basis, to help protect their retirement savings from being eroded by unwanted insurance premiums.

The Putting Members’ Interest First (PMIF) legislation requires certain Australians to opt-in for life cover through their Super and affects the accounts where:

  • The Super balance is under $6,000, or
  • The Super account didn’t receive contributions for at least 16 months, or
  • A new Super fund member is under 25 years of age.

How can you elect to keep your insurance?

To avoid having your insurance cancelled, you may need to take action before 1 April 2020. You can do this by:

  1. Contacting your super fund on their specific process in opting into your insurance within your fund.

Note: Clients who are impacted will also likely be contacted by the superannuation fund. However, the processes to opt in to keep your insurance will vary slightly between superannuation funds.

It is important to note that YOU must take action. An adviser cannot opt in on behalf of you.

Some things you should consider before deciding.

  • By doing nothing, you may lose this insurance cover or any ability to make a claim against this insurance cover.
  • 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 dependents or other beneficiaries will not receive the insurance benefit inside this account if you die (as covered by their 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 the policy).
  • It can be complicated for certain people to get insurance cover. For example, if they 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, you should check your most recent statement, product disclosure statement (PDS) or speak to Strategic Advice Network. 

Support for you

If you are in any doubt how this may impact you, would like to discuss when and how you can access your super, under the normal rules or due to special circumstances, please give us a call.