Changes to Insurance inside Superannuation
The Federal Government recently passed the “Protecting Your Super” (PYS) legislation package. This is designed to provide better outcomes for superannuation members by preventing inactive superannuation accounts being eroded by insurance premiums.
From 1 July 2019, Super Funds are required to cancel insurance cover for any members whose accounts are deemed “inactive” for a continuous 16 month period and where the member has not elected to maintain insurance. Broadly, a member’s account is considered ‘inactive’ if no contributions or rollovers have been received. This means any insurance cover linked to a member’s super account – Death, Total & Permanent Disability (TPD) and Income Protection – from both group and retail insurance providers will be affected.
Super Funds have already started to write to members impacted by the PYS legislation. If you receive such a letter it’s important not to ignore it. You will need to follow your Super Fund’s instructions if you wish to retain your insurance cover.
Should you wish to discuss this further or are interested in reviewing your personal insurance needs, please call our Financial Planning team on (02) 8978 3770 or contact us using the button below.