New laws have been introduced as part of the Federal Government’s ‘Protecting Your Super’ packages. This package is aimed at ensuring insurance within your superannuation is appropriate and that members are not paying for insurance that they do not know about or paying premiums that may erode their retirement savings. Accordingly, if your superannuation account has been inactive (which means no contributions have been received for 16 months), on 1 July 2019, your insurance will be cancelled – unless you direct your fund otherwise. In the event your account is inactive, you will need to take action at least 2 weeks before 1 July 2019 and nominate whether you want to opt in and keep your insurance.
While insurance through superannuation accounts may not be appropriate for everyone, it could offer financial support if you become injured or ill. If you do not elect to continue your insurance, your insurance cover will be cancelled and you will not be able to make any future claims on your insurance policy in circumstances where the relevant date upon which you become disabled within the meaning of the policy post-dates the cancellation. If your insurance is cancelled and you subsequently wish to take it back up, you will have to make a fresh application for it and there is a risk that the insurer will not accept your fresh application or that your new insurance will not cover you sufficiently, depending on your circumstances.
We want to ensure that your insurance is effective and in your best interests. If you believe your super account may be deemed inactive, we urge you to seek advice from a financial adviser as a matter of urgency as to whether you should continue your insurance cover. We, as lawyers, cannot provide any financial advice and we would suggest you seek financial advice regarding any insurance decisions you make. However, if you need any assistance with a TPD insurance claim, please do not hesitate to contact us.
* Disclaimer: The information provided here is to be considered general information only. It is not legal advice, and does not consider your personal circumstances in any way. It should not be relied upon for any purpose – legal, financial or otherwise.