Government changes to insurance in super

What's insurance in super?

If you have super, you’ll more than likely also have access to life insurance as most super funds provide a basic level of insurance cover when you join the fund. This is often referred to as automatic or default cover.

With insurance in super, insurance cover will typically help to provide financial support if you’re not able to work from either illness, injury or even death. Having the right insurance cover can help to protect you and your loved ones when you need it the most.

Do you have insurance in your super?

To find out what insurance you have with us, visit plum.com.au to check your super account online, check your annual statement or call us.

If you do have insurance in super, we’ll let you know in writing if you’re impacted by the changes that may result in your insurance cover being cancelled.

Did you know that you can log on to your super account by visiting our website if you have online access?

Get started now to track the latest information on your account.

Government changes to protect your super

The Government has rolled out laws in 2019 aimed at protecting your super savings by making sure your balance isn’t reduced by the cost of insurance.

Due to these new laws, your insurance cover in your super may be cancelled if your super account:

has a balance that is less than $6,000
is inactive - inactive means, no contributions or rollovers for over 16 months.

Need more information?

Visit the Australian Securities and Investments Commission's (ASIC) MoneySmart website.
Visit the super industry's Protecting your super website at timetocheck.com.au

Putting Members' Interests First (PMIF)

Stops us from providing insurance cover to you if your super account balance hasn’t reached $6,000 between 1 November 2019 and 1 April 2020. This is a once-off measure to cancel insurance cover on low balance accounts. If your super balance reaches $6,000 or you opt-in to keep your insurance in writing by 1 April 2020, it won’t be cancelled.

Protecting Your Superannuation Package (PYSP)

Stops us from providing insurance cover to you if your super account is inactive (inactive means, your super hasn’t received a contribution or a rollover for over 16 months) - unless you choose to keep your insurance cover. This change started from 1 July 2019. Don’t worry though - we’ll send you regular reminder notices if your account becomes inactive, so you can act before your insurance cover is cancelled.

Consider your options

With the new insurance in super laws, it’s an important time to consider if having insurance in super is right for you. It’s about you making sure that you have the right type and amount of insurance cover to meet your financial needs now and in the future, because the cost of insurance is deducted from your super savings.

It’s also about making sure that you’re not paying for insurance cover that you may not need. If you have more than one super account, you should consider how paying multiple insurance premiums will affect your super savings.

Find out more on our Think ahead. Act now for the future section.

Steps to keep your insurance

Low balance super accounts under $6,000

If you’d like to keep your insurance cover and your super account balance is less than $6,000—here’s what you can do by 31 March 2020:

Fill in the Choose to have insurance cover in super form by:
- Simply logging in to plum.com.au to complete and submit the online form
- Or downloading the PDF form and once completed, return it to us
Or take steps to make sure your account balance reaches $6,000 by 31 March 2020.
- Check if any more contributions are due to be made—if your employer makes contributions for you.
- Make sure your super receives a contribution or rollover. You can also set up regular contributions into your account.
- Look at what other super accounts you have—you may want to consolidate them into one account (also known as a rollover).

Inactive super account

If you’d like to keep your insurance cover and your super account balance is inactive —here’s what you can do:

Fill in the Choose to Keep My Insurance Cover form by:
- Simply logging in to plum.com.au to complete and submit the online form
- Or downloading the PDF form and once completed, return it to us
Or make sure your super account receives a contribution or rollover to make it active again. You can also set up regular contributions into your account.
Or look at what other super accounts you have—you may want to consolidate them into one account (also known as a rollover).

If you return the completed Choose to Keep My Insurance Cover form for inactive accounts and/or the Choose to have insurance cover in super form for low balance accounts, your insurance cover will stay in place until you tell us otherwise, provided there are sufficient funds in your account to pay for the cost of insurance.

What happens if your balance reaches $6,000?

If your super balance reaches $6,000 before 1 April 2020 your insurance will stay in place if you have sufficient funds in your super account to pay for the cost of insurance.

What happens if your balance doesn’t reach $6,000?

If your super balance doesn’t reach $6,000 or your Choose to have insurance cover in super form hasn’t been received by us, we’ll have to cancel your insurance in super on 1 April 2020.

This means that you’ll no longer be protected with your insurance cover and could be without protection if the unexpected happens to you.

What happens when your insurance gets cancelled?

If you’re impacted by an inactive account or a low balance account (less than $6,000) and you don’t do anything, your insurance will be cancelled. Your insurance cover will no longer be available to you and you won’t be able to claim for events that happen from the date your insurance is cancelled.

You’ll need to re-apply and you may need to provide some further medical and employment information depending on when you re-apply. Your application may be declined by the insurer.

What you can expect next?

Low balance accounts (less than $6,000)

If you don’t take any steps to keep your insurance cover, we’ll be required to cancel your insurance on 1 April 2020. We’ll send you a confirmation letter letting you know when your insurance is cancelled.

Inactive accounts

We’ll send you regular reminder letters if your super account has been inactive for 9, 12 and 15 months, to give you an opportunity to choose to keep your insurance cover. If you don’t take any steps to keep your insurance, we’ll be required to cancel your insurance. We’ll send you a confirmation letter letting you know when your insurance is cancelled.

Insurance in Superannuation Voluntary Code of Practice

We’re committed to helping members better understand and manage their insurance in super to make sure they have insurance cover that’s right for them.

That’s why we’re on board with the Insurance in Superannuation Voluntary Code of Practice which started on 1 July 2018. The code is important and a first of its kind for the insurance industry aimed at providing greater transparency for members and consistency of information and processes across the super industry.

How we're tracking

We’re already meeting some of the standards the code sets out, and on track to meet the remaining items by March 2021. The 'Insurance in Superannuation Voluntary Code of Practice' (ISVCOP) supports us to provide the best experience for our members.

Check out our Insurance Strategy and our Key Facts Sheet for Plum which can provide you with an overview of the insurance cover we offer and what you can expect from us.

We’ll continue to provide updates as we move forward with our ISVCOP changes. Read more in our transition plan, outlining the details and key timings.

We're listening to you

Our members are at the centre of everything we do and we’ve been listening carefully to the things that you’d like us to do better. That’s why we welcome these changes that protect your super savings and ask you to choose whether to have insurance or not based on what’s right for you.

Why did I receive a letter telling me my insurance will be cancelled because my super account balance is under $6,000?

A letter was sent to you because your super had a low balance (less than $6,000) on 1 November 2019, so under new Government changes, your insurance in super may be cancelled on 1 April 2020. We’ll be required to cancel your insurance cover on 1 April 2020 unless you take one or more easy steps to continue your insurance cover.

Check out the Steps to keep your insurance section.

What do I need to do to keep my insurance?

You need to take some steps to keep your insurance in super – if your super account balance has never reached $6,000 by 1 April 2020, or your super account has been inactive for 16 months.

You can take one of these steps:
- let us know you want to have insurance in super by completing an inactive super account election form (Choose to Keep My Insurance Cover) and/or a low balance election form (Choose to have insurance cover in super) depending on why your insurance might be cancelled
Or
- you’ll need to make sure your super account receives a contribution for an inactive account or a rollover to reach $6,000 on or after 1 November 2019 for a low balance account
You’ll need to make sure you do this by the date set out in our personalised letter to you.

Remember that you’ll also have to have sufficient funds in your super account to pay for the cost of your insurance.

Check out the steps to keep your insurance information.

What happens if I don’t do anything?

If you don’t do anything before the date your cover is due to be cancelled, your insurance will be cancelled and you won’t be able to claim for events that happen after this date.

We’ll write to you to let you know if this happens and what options are available and the important timings.

How do I know that I’ve got the right level of cover?

Typically, insurance cover is designed to help provide you and your family with financial support to maintain your lifestyle if the unexpected happens and you become injured, ill or die.

Having the right levels of cover is important to make sure you and your loved ones don’t experience financial stress as you deal with ongoing living expenses with less income. We encourage you to regularly review your levels of cover and adjust them to meet your current and future financial needs.

What are the main reasons why my super account balance may reduce?

There are many reasons why your account balance may reduce. For example, if contributions aren’t being made into your super account and fees and insurance costs are being deducted, plus depending on your investment returns, these are all factors impacting why your account balance may reduce.

This is where the PYSP package changes are designed to protect your super account. We’ll let you know that your account is inactive, that way you can decide to make a contribution into your super account. Since the cost of insurance reduces your super balance, you can decide if you want to keep, or change, the insurance cover you have in super at any time.

Why didn’t I know that my super account balance was being reduced by the cost of insurance?

There may be a number of reasons why your account balance is being reduced by the cost of insurance. These may include the amount, type of cover you hold, and how much you’re paying for this cover. To help you understand these items, all your super account details including your insurance cover are outlined in your welcome kit and annual statement, which we provide to you.

The insurance cover that’s right for you depends on your personal, family and financial circumstances, as well as your income and lifestyle. You can regularly review your account and your insurance cover so that it continually meets your needs, especially as your circumstances may change.

Why didn’t I know that I had insurance in my super account?

In many cases, employers select default insurance cover for employees which typically includes Death and Total & Permanent Disablement insurance and sometimes, Income Protection. This is set up automatically at the time when a new employee joins the fund. If you have MySuper, insurance cover is automatically included. To help you understand, all your super account details, including your insurance cover, they are outlined in your welcome kit and annual statement, which we provide to you.

How do I find out if I have insurance as part of my super?

You can find out if you have insurance in super by reviewing your welcome kit, your latest annual statement or insurance summary. It’s important that you review the information in these documents to make sure we have the most up-to-date information about your account. These documents set out your super account balance, what type of insurance you have, how much you pay for insurance and how much is being deducted for your insurance premiums.

You can also cancel or change your insurance cover at any stage.