Don't lose your life insurance in super!
You may have recently received a letter from your super fund, suggesting that your insurance may be cancelled. This is a result of new Federal legislation passed earlier this year. The objective of this legislation is to ensure that people are not paying for insurance that they do not need. The assumption is that people who are no longer contributing to a super fund, most likely also no longer need the insurance available through these funds.
This is not always the case and you therefore will need to take action to retain your insurance. Where someone has good insurance coverage that cannot be replaced or their health has deteriorated, then it has been a common strategy to recommend holding onto the insurance in a super fund, even if that super fund is no longer being used for ongoing contributions.
Amongst other measures, this legislation requires that superannuation accounts that have not received a contribution or a roll-over for 16 months must be cancelled. This legislation starts from 1 July 2019 and any inactive period prior to 1 July 2019 will be included in the calculation of the 16 month period. Thus, some super fund members may have their insurance cancelled immediately from 1 July 2019. You will have the opportunity to elect to retain your insurance, by completing the election form and returning it promptly to your super fund.
If you have received a letter from your super fund regarding the cancellation of your life insurance, you must act now!
It is particularly important, where your contact details change, that you advise the super fund or at least let our office know. If the super fund does not have your current contact details, then you will not receive the notification letters and your insurance will ultimately be cancelled without your knowledge.
Please contact us on (02) 9988 4033 if you have any questions or concerns.
|Tags: Life insurance Superannuation Rhodes Docherty|