I was going to post this a lot earlier however figured as it doesn’t affect a large % of millennials and find we millennials tend to delay anything involving super and insurance (let alone when they’re combined!) so if it’s not urgent, we’d probably put it off and forget about it.
This urgency only affects you if you:
- Have a super account (hopefully, you know if you do or not)
- Have insurance in that fund (if you’re not sure, the answer is probably yes)
- You or an employer haven’t contributed to that fund in the last 16 months (e.g. have been unemployed/working overseas/self-employed/have multiple super accounts)
You should consider your need for types and level of insurance coverage (see here) to ensure you’re not underinsured and taking on risk or overinsured and paying unnecessary premiums that are reducing your retirement savings but you can relax this afternoon.
This is you?
Basically, you have a super account and you may or may not know you more than likely have some form of default insurance where the fund provides you with a level of life insurance, disablement insurance (TPD) insurance or income protection and premiums for this cover come out of your super and reduce your balance and retirement savings.
The Government caught onto this and realised not a lot of people are aware of this cover so are forcing funds to cancel this cover from 1 July for people who:
- Haven’t contributed/rolled over anything into the fund in the last 16 months; and
- Haven’t actively told the fund they want the insurance to continue (“opted-in”)
The change is well-intentioned as find not a lot of people are aware of the cover and the cost of the premiums can be a drain on your retirement savings if not needed BUT there could be unintended consequences where valuable insurance is cancelled that may be difficult to get back (depending on your health).
You should have received correspondence from your fund recently if it affects you and how to act already so hopefully have considered it and acted accordingly however if you haven’t I’d strongly encourage you to:
- Think about your fund/s
- The coverage you have within it/them (login/call up if not sure)
- Consider your need for types and level of insurance coverage (see here again)
- Act accordingly by 30 June – NOW! (or the date the fund has advised) by going onto your fund’s website or calling them up
Not sure if you have an old super account/s?
You can log in to MyGov and these are shown in the ATO section.
Call up your fund or don’t hesitate to ask me if you have any questions.