The government has introduced additional rules to insurance within super as part of new legislation called Putting Members’ Interests First. The rules aim to protect young members and members with small balances from having their super accounts eroded by fees for insurance cover that they might not be aware of or may not need, giving members’ super the best chance to grow.
From 1 April 2020, super funds will no longer be able to offer insurance automatically to new members if any of the below applies:
For existing super members, irrespective of their age, the new rules mean insurance will be cancelled if they have a super balance below $6,0001 unless:
Any existing members with super balances above $6,000 on 1 November 2019 are not impacted.
The new legislation may impact existing super members2 with low balance accounts who have insurance in super, as well as new members who join a super fund from 1 April 2020.
If you’re a new member who opens a super account from 1 April 2020, insurance cannot be provided automatically if any of the following criteria applies to you when you join:
You may need to take action and opt in if you wish to add insurance cover to your account when joining. You may also be eligible for automatic insurance cover once you meet these above conditions.
The below table shows a summary of opt-in requirements for members with insurance through super who have a low super balance:
^ Excluding members who have insurance paid in full by their employer
* Members who join a super fund from 1 April 2020 and who wish to add insurance through super
** Any members who opened a super account before 1 April 2020 with insurance through super
*** excluding any members who have ‘opted in’ to keep their cover before 1 November 2019, due to their super account being ‘inactive’.
You may have an arrangement with your employer, where the employer pays the full cost of your insurance premiums by making additional contributions on your behalf. In this case you don’t have to do anything to keep this particular insurance cover. This applies to existing members, as well as (any) new members who join a super fund, where the employer pays the cost of their insurance, irrespective of the member's super balance or the member's age.
Please note: Additional changes to super legislation regarding inactive super accounts came into effect in July 2019 which may also impact the insurance cover you have in your super account. Learn more about these additional changes.
It’s important you understand the insurance in your super account, including the type and amount of cover you have, and the premiums you’re paying. To view your insurance details, log into your online account, or speak to your financial adviser if you have one. Or call us and we can help.
Everyone’s circumstances are different – so the decision to keep your insurance will depend on your personal and financial situation. We think insurance and retirement savings are both important. But it’s important to understand that the cost of the premiums for insurance through your super can reduce the amount of money available to you in retirement – particularly if you have cover through multiple super accounts or insurance cover outside super.
When reviewing your insurance cover you may want to consider a number of things, which may include;
You can also refer to the ASIC MoneySmart website at moneysmart.gov.au for more information on insurance through super and insurance calculators.
Haven’t found the information you’re looking for? Have a look through our frequently asked questions, and if you can’t find the answer to your question, call us on 132 135.
If your super account has a balance of less than $6,000 on 1 November 2019, and you have never previously made an election to take out or maintain your cover, your insurance through super may be cancelled from 1 April 2020. If this applies to you we will be in touch (by letter or email) by the end of November 2019 to let you know your options if you wish to keep your cover.
If you received a notification from us earlier this year, advising that your account hasn’t received any contributions or rollovers for a period of time, and you opted in to keep your insurance before 1 November 2019, you do not have to opt in again and you won’t receive an additional notification from us. Your insurance cover will be maintained even if your account balance is less than $6,000 at 1 November 2019.
If you opted in after 1 November 2019 due to your super account being inactive, or you never opted in before, you will have to take additional action if your super balance is below $6,000 and you wish to keep your insurance cover. In this case we will send you a notification and let you know your options if you wish to keep your cover by the end of November 2019.
If your super account is eligible to receive contributions then you may be able to make additional contributions to increase your account balance to $6,000 before 1 April 2020. In this case your insurance cover will be maintained, even if your balance drops below $6,000 at a later stage. Please ensure that you monitor your contribution caps, and make sure any contributions made are sufficient to cover any fees/deductions coming out of your account.
If your employer makes additional contributions to cover the full cost of your insurance premiums, and they notify us about this arrangement, you will be able to maintain your insurance cover while this arrangement is in place. However, if your super balance is below $6,000 you may still want to opt in to protect this cover in case you leave the employer, or your employer ceases paying your insurance premiums.
If you tell us you want to keep your insurance because your account balance is below $6,000, then your insurance may still be cancelled if your super account becomes inactive in the future. We will notify you in advance and let you know about your options if you wish to keep your insurance.
1. Under the government’s Putting Members’ Interests First changes, from 1 April 2020 insurance through super cannot be provided to a member if their super account balance has never reached $6,000 since 1 November 2019 if the member has not opted in to keep their cover.
2. Existing super member means any member that began to hold a super account prior to 1 April 2020, including those that acquired a product with insurance from 1 November 2019 onwards.
3. Insurance may cancel before this date if you elect to cancel your cover voluntarily, or because there are insufficient funds in the account to pay insurance premiums, or if your super account becomes ‘inactive’ for a continuous period of 16 months, and you have not opted in to retain your cover in this circumstance. Inactive means no contributions or rollovers have been received in respect of a super account.
Information current as at 1 July 2021.
This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs.
Before requesting a rollover, you should consider where your future employer contributions will be paid (if your employer contributions are currently being paid to another fund) and check with your other fund(s) to determine whether there are any exit or withdrawal fees for moving your benefit, or other loss of benefits (e.g. insurance cover), noting that you may not receive the same type or level of benefits after the rollover. You may not be covered for injuries or illnesses that have arisen since you took out previous insurance, and you may lose loyalty benefits.