Super changes could catch millions of Australians unaware
From 1 July 2019, you may no longer be covered by your super's default insurance.
Changes to life insurance through superannuation could catch millions of Aussies unaware, with a study finding that more than half (53%) of those surveyed were unaware of the impending changes that take effect on 1 July 2019.
The research, conducted by the Association of Superannuation Funds of Australia (ASFA), warns that more than three million Australians could be affected. If that's the case, and the study holds true, almost 1.6 million Aussies could lose their cover through super come 1 July and be none the wiser.
The changes, which come as part of Protecting Your Super, are designed to prevent insurance from whittling away at the balances of inactive super funds. So if an account hasn't received a contribution in 16 months or more, the default insurance option will be switched off.
The study also found that while 85% of people have insurance through their super 33% of those surveyed were certain they didn't have cover. It's this disconnect coupled with the upcoming changes that concerns ASFA CEO Dr Martin Fahy.
"We already know Australians are not highly engaged with their superannuation – from the balance to the insurance products they hold – however this study demonstrates that the problem only becomes more acute when looking at those Australians most likely to be impacted by the changes," Dr Fahy said in a statement.
While super funds have been sending out communications about upcoming changes, those kinds of mailings can be easily missed or ignored. CEO of the Financial Services Council (FSC) Sally Loane says that these changes highlight the need for people to be more active in monitoring their super.
"The Protecting Your Super changes will help reduce account erosion through the additional fees and insurance that come along with unintended duplicate accounts. But this is also a timely reminder to check your super and make sure you have the right insurance for your circumstances," Loane said in a statement.
If you're unsure about how these changes will affect your insurance through super the ASFA and FSC, along with super funds, developed the "time to check" website as a resource to help you navigate these changes.
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