New Rules on Insurance through Super
As of 1 July 2019, a law was passed for members to cancel insurance cover on inactive super accounts. The government has recently passed another law to protect your superannuation account to make sure your balance is not reduced by the cost of Insurances that you may not know about or need.
Below are the main points:
- If your account hasn’t reached a balance of $6,000 by 1 April 2020- your insurance in super will be cancelled.
- If you below the age of 25, you may not be eligible for automatic insurances.
Clients are often left with the questions in mind;
Is insurance through super right for me?
It’s important to review this and make sure you have the right cover, the right insured amount to make sure you are protected financially when things don’t go to plan.
What’s are the benefits of insurances in super?
In the current environment where insurances through super is being praised for its tax effectiveness and ease on cashflow is this the best thing for you? How does this affect your retirement nest egg? Is it better to hold these insurances outside of super? These are things that need to be discussed to specific client circumstances.
In conclusion, insurances through super should be discussed with your financial adviser to determine the best structure to hold your insurance cover.
This material is for information/educational purposes only. It does not provide individually tailored financial advice.