Changes to insurance in super

On 1 April 2020, government changes will come into effect that may impact the insurance you have in your super.

Here’s a snapshot of the changes:

If your super balance hasn’t reached $6,000 by 1 April 2020—your existing insurance in super may be cancelled.
From 1 April 2020, when you join a super fund, insurance in your super won’t be provided until you’re at least age 25 and your super balance has reached $6,000.

This new law, known as Putting Members’ Interests First, is about protecting your super savings by making sure your super balance isn’t reduced by the cost of insurance that you may not know about or need. If you’re affected by the changes, you can still choose to have insurance in super, but you’ll have to “opt in” by completing the Choose to have insurance cover in super form.

We encourage you to make your own decisions about whether to have insurance in super or not. It’s all about you deciding what’s right for you. Learn more about changes to insurance in super. You can also visit moneysmart.gov.au or apra.gov.au/putting-members’-interests-first.

Note, these changes don’t apply where your employer pays for the full cost of an insurance benefit.

But what is insurance in super?

If you have super, you’re likely to have insurance in super as most super funds provide a basic level of insurance cover. This 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, but the cost of it may reduce your super balance since insurance premiums are deducted from your super balance.

Do I have insurance in super?

Is insurance in super right for you?

There are a few things you need to know and think about when reviewing what type of insurance cover you need to help protect your financial future. Read more about the different types of insurance and considerations when determining your insurance needs.

What are the benefits of insurance in super?

Depending on your circumstance, it may be important to have insurance to cover your life and your income. Insurance through your super account may be a tax-effective way to cover the cost of insurance, and as the premiums are paid from your super account, there may be no impact to your take-home pay. You may also be eligible for insurance in super without having to take medical tests or provide evidence of good health to the insurer.

Can I change my mind about insurance in super?

You can alter or cancel your insurance cover at any time . 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.

Please contact us on Phone (08) 6225 5150 if you seek further information on this topic.

Source : MLC Insights February 2020

Important

NULIS Nominees (Australia) Limited AFSL 236465 ABN 80 008 515 633 provides this information as trustee of the MLC Super Fund ABN 70 732 426 024. This information may constitute general advice. It has been prepared without taking account of individual objectives, financial situation or needs. Before acting on any information, you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives. We recommend you obtain financial and tax advice tailored to your own circumstances prior to making any investment or acquisition decision. Any general tax information is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent. This information is current as at 30 January 2020 and may be subject to change, for example should there be a change of legislation or economic conditions. An investment with NULIS is not a deposit with or liability of, and is not guaranteed by, NAB or other members of the NAB Group, and is subject to investment risk including possible delays in repayment and loss of income and capital invested. Past performance is not a reliable indicator of future performance.