New rules on insurance through super

The government has recently passed another law known as Putting Members’ Interests First, which is an extension of the inactive super account change. This latest law change is also about protecting your super savings and making sure your balance isn’t reduced by the cost of insurance that you may not know about, or need. Here’s a snapshot of the change which starts on April 1, 2020:

1. If you have an existing super account that hasn’t reached a balance of $6,000 by 1 April 2020—your insurance in super will be cancelled.

2. If you’ve newly joined a super fund, you can no longer be provided with automatic insurance in your super until you reach age 25 and your super balance reaches $6,000, unless you opt-in before then.

If you’re affected by the changes, we encourage you to make your own decisions about whether to have insurance in super or not – including the type and level of cover and the cost of insurance. It’s all about deciding what’s right for you.

What if I want to keep my insurance?

We’ll let you know more about these government changes and how they impact you. This will include how you can elect to have insurance cover in your super and when you need to respond to us.

Is insurance through super right for you?

So, now’s an ideal time for you to consider your personal super and insurance needs, review your super account balance and review any insurance you have in your super account.

It’s important to make sure you have the cover type and amount that’s right for you and you don’t pay for more cover than you need. All the while having enough cover to protect you financially if things don’t go to plan. If you’re unsure about what’s best for you, please speak to a financial adviser to learn more.  

What are the benefits of insurance in super?

Just like when you take out insurance to protect your home and car, it’s important to have insurance to cover your life and your income. What’s more, insurance through your super account may be a tax-effective way to cover the cost of insurance. You may also be eligible for insurance without having to take medical tests or provide evidence of good health to the insurer (depending on the product).

A change of mind

Did you know you can alter or cancel your insurance cover at any time by simply contacting us or visiting mlc.com.au/superinsurance. It’s important to know that if you do cancel your insurance, but later you’d like to re-apply, you may need to provide further medical and employment information.

SOURCE: https://www.mlc.com.au/personal/blog/2019/10/new_rules_on_super_insurance