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Don't lose your life insurance in super!

Posted on 11 June 2019

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.

 

Every effort has been made to offer the most current, correct and clearly expressed information possible within this site. Nonetheless, inadvertent errors can occur and applicable laws, rules and regulations may change. The information contained in this site is general and is not intended to serve as advice. No warranty is given in relation to the accuracy or reliability of any information. Users should not act or fail to act on the basis of information contained herein. Users are encouraged to contact Rhodes Docherty & Co professional advisers for advice concerning specific matters before making any decision. Liability limited by a scheme approved under the Professional Standards Legislation.

Rhodes Docherty Financial Advisors Pty Ltd ABN 43 122 391 315 is an Authorised Representative of RDC Advisors Pty Ltd, Australian Financial Services Licensee No. 396268 (Ph. 02 9988 4033). Any advice contained in this website is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. You should seek advice from Rhodes Docherty Financial Advisors who can consider if the general advice is right for you.

 

Tags: Life insurance Superannuation Rhodes Docherty
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