What's insurance in super?
If you have super, you’ll more than likely also have life insurance as most super funds provide a basic level of insurance cover when you join the fund. This is often referred to as default cover.
The recent Government changes may impact any insurance provided for you as part of your super account. Now is a good time to check if you have insurance within super, check if you’re at risk of your insurance being cancelled and decide if you want to keep it.
Under new law known as the 'Protecting Your Superannuation Package' one of the changes designed to protect your super savings, is to make sure your super account balance isn’t inappropriately eroded by the cost of insurance. This new law prevents us from providing insurance cover to you if your super account is termed, 'inactive' - unless you specifically choose to keep your insurance cover. This change starts from 1 July 2019 and you may be impacted.
You’ll be impacted if you have an inactive super account - that is, if your super account hasn’t received a contribution or a rollover within the last 16 months - because we’ll now be required by law to cancel your insurance cover in super. This means you’ll no longer be protected with insurance cover, so you could be at risk if the unexpected happens.
It’s important for you to consider if you’d like to keep your insurance in super. It’s about making sure you have the insurance cover you need, to meet your personal circumstances, because the cost of insurance is deducted from your super balance and that you’re not paying for cover you don’t need. Read more about things to consider when reviewing your insurance.
If you have an inactive super account, but you’d like to keep your insurance cover - it’s really easy.
Simply take one or all of these steps before the date we must cancel your insurance – that is the date on which your super account has been inactive for 16 months:
Fill in the Choose to Keep My Insurance Cover form and return it to us, to let us know you want to keep your cover and confirm you understand that the cost of insurance will continue to be deducted from your super account.
Make a contribution or rollover. You can also set up regular contributions into your account.
The new law starts on 1 July 2019. So if your account has already been inactive for 16 months or more, or will be by 30 June 2019, then you’ll need to take action by 1 July 2019—if you decide you’d like to keep your insurance cover.
It’s important you understand what it’ll mean for you if you’re impacted by the cancellation of your insurance cover. If you decide not to return the Choose to Keep My Insurance Cover form or make a contribution or rollover before you reach your 16 month inactive deadline, we’ll be required to cancel your insurance cover.
This means your cover will no longer be available to you and you’ll need to re-apply for insurance. Depending on how long it’s been since your insurance cover was cancelled and when you subsequently re-apply, you may need to provide some medical evidence and employment information. In some instances, especially if you had a higher level of cover, re-applying may no longer be available to you.
We’ll let you know if your account becomes inactive, to give you a chance to take steps to keep your insurance in super.
Starting from 1 July 2019, we’ll send notifications to let you know that your account is inactive. This means that your insurance is at risk of being cancelled when you reach the 16 month inactive account deadline. If your account remains inactive for 16 months, and you don’t complete and return to us the Choose to Keep My Insurance Cover form, or make your account active by making a contribution or rollover to your super account, we’ll cancel your insurance and send you a letter confirming that your insurance cover has been cancelled.
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.
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.
We’ll continue to provide updates as we move forward with our changes. Read more in our transition plan, outlining the details and key timings.
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. The recent Government changes are also targeting things that need to be improved for members within super. We’re working together to make things better with insurance in your super account.
Check out some of your most commonly asked questions:
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.
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.
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.
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.
Did you know that you can log on to your super account via our website at any time if you have online access?
Get started now to view the most up-to-date information on your account.