What the new changes to superannuation mean for your life insurance
Find out what why the government has introduced changes to superannuation through life insurance.
We all know life is precious, and that’s why many Australians have a life insurance policy in place should something unexpected happen.
There’s a chance you currently hold a life insurance policy as part of your super fund, but may not know it’s included. From July 1, changes are coming to life insurance through super — find out what the changes are, and how you may be affected.
What are the changes to life insurance policies integrated into superannuation funds?
From 1 July 2019, some Australians can expect changes to their life insurance policies that are included as part of their super funds.
As part of the Government’s ‘Protecting Your Super’ changes, if you hold a life insurance policy through your super fund and neither you nor your employer have made a contribution for the last 16 months, your policy could be cancelled.
The July 1 super fund changes have been designed by the government in an attempt to protect Australians from unnecessary fees and insurance premiums that they may not know they’re paying for. The changes ensure that inactive accounts with low balances won’t be affected by ongoing insurance premiums and fees.
Are you affected?
Your super fund should have contacted you either by post or email to inform you about the changes. Be sure to check your mail and emails for any communication regarding this.
If your super account is regularly receiving contributions, your super won’t be affected by these changes.
However, if neither you nor your employer have contributed in the last 16 months to your super account, your life insurance policy may be cancelled. This is especially the case if you’re taking a break from work, working in a contract role, running your own business or working overseas. If this is you and you’d like your insurance policy to stay in place, you may need to take action.
If you haven’t received any communication or are unsure if your life insurance is affected, it’s a good idea to get in touch with your super fund.
Why you should consider life insurance
If you don’t have life insurance or are considering switching, it’s important to know the value of holding a life insurance policy.
We know that life is precious, but it’s also full of responsibilities. Life insurance can help provide security and peace of mind for you if the worst were to happen. Life insurance may be beneficial to you if you:
- Have a family or dependants: The financial future and security of your dependants could be protected with life insurance.
- Live with your partner: Life insurance could help to cover some lost income if one member of the couple can’t work.
- Buy or own a house: Life insurance could help with mortgage repayments if they fall to one person.
- Start a business: Life insurance could help support servicing or finalising your business closure if business doesn’t go so well.
There are a few different cover types to consider when it comes to life insurance. Each insurance type covers you for a different area of your life.
- Life cover: If you become terminally ill or pass away unexpectedly, life cover can help. A lump sum payout could help care for your family or your dependants if you no longer can.
- Total and Permanent Disability (TPD): If you’re sick or injured and can’t return to work, this policy could provide a lump sum payout to help support you.
- Income protection: If you become sick for a long period of time or can’t work and earn an income, this policy could provide a monthly benefit, generally up to 75% of your regular pre-tax income. At Medibank, we know how important your financial security is. That’s why we’ve created a series of tailored life insurance policies designed to meet your needs — whether you’re looking for simple cover, or something more comprehensive.
Get a quote for our products online, or call 1300 722 568 to receive a quote over the phone.
And remember, if you’re a Medibank member, you receive a 10% discount on the premiums of your policy.
This is general advice only. The information here doesn’t take into account your personal objectives, financial situation or needs. Limits, exclusions and conditions apply. Before you take out any Medibank life insurance products, you should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) available at medibank.com.au/life. Medibank life insurance products are issued by the insurer, Swiss Re Life & Health Australia Limited ABN 74 000 218 306, AFSL 324908, distributed by Greenstone Financial Services Pty Ltd ABN 53 128 692 884, AFSL 343079, (GFS), and promoted by Medibank Private Limited ABN 47 080 890 259, AR 286089 (Medibank Private). Medibank Private is an authorised representative of GFS.
What you need to know about Life, Income and Funeral cover.Read more