New Government legislation has introduced more changes to the insurance cover provided within superannuation.
Under the Putting Members’ Interests First legislation, from 1 April 2020 super funds will no longer be able to provide insurance cover for:
- Members with an account balance that has not totalled $6,000 or more since 1 November 2019
- New members aged under 25 who join from 1 April 2020.
For members in certain dangerous occupations, the legislation will allow super funds to continue providing insurance.
The legislation aims to ensure that members are not paying for insurance in super that they don’t know about, or premiums that unnecessarily erode their super savings.
If you’re affected, consider your options.
Your super fund will contact you if you’re affected by these changes to provide information about your options, which are:
- to maintain your insurance cover; or
- to do nothing, which means your cover will cease on 1 April 2020 and premiums will no longer be deducted from your account from this date; or
- to cancel your cover before 1 April 2020.
Funds will also provide information on their ‘dangerous occupations exception’ if they are applying it.
These important changes in Government legislation will impact many people and can be a prompt to review your insurance to ensure it meets your current needs and circumstances.
Insurance cover within super provides many benefits including:
- Confidence and peace of mind knowing that you have protection in place.
- No out of pocket costs with insurance premiums deducted from your super account balance.
- Bargaining power – funds negotiate competitive fees for members so you’re paying less than if you purchased insurance yourself.
- Tax benefits of paying for your insurance before paying tax – which you don’t have when purchasing insurance outside super.
Look out for any communication from your super fund so you can make the right choice about your insurance cover.
For more information on these changes contact BUSSQ on 1800 MY BUSSQ (1800 69 2877).
The information supplied in this article is general advice only and does not take into account or consider your personal objectives, financial situation or needs. Before acting, you should review the relevant Product Disclosure Statement to ensure you have all the information about the product and how it works and consider the appropriateness of the information to your needs or seek independent advice from a properly qualified professional. Prepared by BUSS (Queensland) Pty Ltd (ABN 15 065 081 281, AFSL 237860) as Trustee for BUSSQ (BUSSQ Fund, ABN 85 571 332 201).