Recently, the Federal Government introduced the Protecting Your Super package, designed (in theory) to ensure that members of Super funds are not paying for insurance cover that they do not know about or premiums that inappropriately diminish their retirement savings.
Whilst we think it was a stupid and short-sighted change – some people who don’t respond will lose the only insurance cover they have – the reality is all of us (myself included) need to take action to keep the cover we have in place.
What the heck is it??
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 Superfund that you want to keep the cover in place. You will then receive a notification from your super fund to remind you about this insurance every 12months. 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. There are various different reasons as to why you would want to keep these insurances (i.e. no medical restrictions, can’t get new cover due to medical underwriting, or simply better value for money than newer policies.)
What do we need to do?
Ok… so what you need to do now, will depend on the Superfund 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.
So… 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. Some of them will make it very easy to do, some less easy… but most should be as simple as a couple of button clicks.
Please make sure you take the steps to ‘keep my cover in place’…. 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.
If in doubt… Contact us here at Humblebee Financial Planning and we can review your current insurances and make sure you have the best protection in place!