New Super Laws: a timely reminder to check your life insurance policy
What measures do you have in place to help protect your family home or business? If life insurance through your superannuation account is one of them, then it’s a good time to give it a quick review – especially if you work in a high-risk environment.
We’ve all switched off mentally during those sombre daytime life insurance ads on TV.
But stay with us, because there’s a good reason we’re writing this article today: new superannuation laws have passed parliament and will come into effect on November 1.
And if you have a super account, there’s a better than even chance you have a life insurance policy attached to it that could be impacted – especially if you work in a hazardous or high-risk industry such as construction, truck driving and mining.
new Super laws: What are the changes?
So, the federal government recently passed the Your Future Your Super legislation.
The measure, which will tie workers to a single super fund from November 1, has been praised for its potential to put an end to people having numerous super accounts that are eaten away by multiple sets of fees.
But concerns have also been raised that workers in hazardous industries, such as construction, truck driving and mining, will be left without suitable life insurance and/or total and permanent disability insurance due to policy exclusions for high-risk occupations.
Now, some super funds that were created for specific industries automatically sign their members up for insurance tailored to their specific professions.
But others don’t.
“Quite often, members only discover they have been paying for a product that is effectively useless when they become disabled and make a claim,” Maurice Blackburn principal Hayriye Uluca explained to Sydney Morning Herald (SMH).
This means if you originally signed up to a fund that is tied to an insurer that uses occupation exclusions, you might end up paying for insurance that’s essentially worthless if you start work in a high-risk industry.
What to do?
The Federal Treasury says it’ll be conducting a review into it all.
But you can quickly and easily conduct your own review to see if you’re properly covered by suitable insurance.
Here’s a straightforward MoneySmart guide on consolidating your super through MyGov. And here’s another guide on things to be mindful of when choosing a super fund.
“The best thing to do is talk to your fund, ask them specifically. Tell them the type of work you do, your occupation and what it involves, and ask them if their policy covers it,” SuperConsumers director Xavier O’Halloran told SMH.
And while you’re at it, don’t forget to review the amount you’re insured for to determine whether your cover is enough to help you – or your loved ones – make loan repayments and protect important assets like your business or family home if need be.
If you’re not sure if your insurance cover is sufficient, call us today and we can put you in touch with a financial planner who can review your situation and provide feedback on your coverage.
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