What is changing? - New insurance laws are coming into effect
From 1 July 2019, new 'Protecting Your Super' laws come into effect. These rules prevent super
funds from providing insurance cover to a member whose super account is ‘inactive’, unless the
member elects to keep their cover.
For these rules, an account is considered 'inactive' if it has not received any contribution or a rollover for 16 consecutive months.
If you hold insurances within an ‘inactive’ super fund (see definition above you may find you have already received a letter or email from the relevant superannuation provider. We have noticed some correspondence has already gone out to clients.
Please note, you will only receive a letter if your superannuation account is ‘inactive’ so if you are contributing into the super account that holds your insurances you have nothing to worry about.
Is your cover at risk of cancellation?
In effect, if a superannuation fund in question has NOT received a contribution or rollover since 22 February 2014 (the last 16 months effectively) the superannuation provider is required to cancel the insurance attached to the account.
Unfortunately they have no choice as it is now legislation. For some clients, this may be as early as the 1st of July 2019!
It is worth noting, some clients may have their main superannuation fund receiving contributions as well as a small ‘inactive’ super fund historically used to fund insurances. In this case, you must get in contact with the provider before the 1st of July if you don’t receive any correspondence.
How to avoid your insurance being cancelled
If you have insurances within an “inactive’ super your cover you must inform the provider you desire to keep your cover before the 1st of July 2019.
Unfortunately every provider has a different process so we suggest you wait for the necessary correspondence from your provider. If you have not received correspondence by the beginning of June we recommend you contact us immediately so we can help. Please remember, you will only receive notice if your superannuation account is ‘inactive’.
We anticipate related correspondence will be sent to client from the relevant provider over the next few weeks.
We are here to help
For any questions about how the legislation changes may impact your insurance cover, call us on 08 9474 2255 or email your adviser.