Haven’t contributed to super in 16 months? Check your insurance
Updated: 1 day ago
This doesn’t affect a large % of millennials, and we millennials tend to delay anything involving super and insurance (let alone when they’re combined!), so it’s easy to miss.
This only affects you if you:
Have a super account (hopefully, you know if you do or not)
Have insurance in that fund (if you’re not sure, the answer is probably yes)
You or an employer haven’t contributed to that fund in the last 16 months (e.g. have been unemployed/working overseas/self-employed/have multiple super accounts)
Not you?
It’s still worth knowing what cover you have and whether it matches your situation, as being underinsured or overinsured both have a cost.
This is you?
Basically, you have a super account and you may or may not know you more than likely have some form of default insurance where the fund provides you with a level of life insurance, disablement insurance (TPD) insurance or income protection and premiums for this cover come out of your super and reduce your balance and retirement savings.
The Government realised not a lot of people are aware of this cover, so since 1 July 2019 funds have had to cancel it for people who:
Haven’t contributed/rolled over anything into the fund in the last 16 months; and
Haven’t actively told the fund they want the insurance to continue (“opted-in”)
The change is well-intentioned as find not a lot of people are aware of the cover and the cost of the premiums can be a drain on your retirement savings if not needed BUT there could be unintended consequences where valuable insurance is cancelled that may be difficult to get back (depending on your health).
Funds write to members before cancelling cover, but letters are easy to miss. If it applies to you, the steps are to:
Think about your fund/s
The coverage you have within it/them (login/call up if not sure)
Work out what types and level of cover suit your situation
Tell your fund if you want to keep the cover before the date in their letter, through their website or by calling them
Not sure if you have an old super account/s?
You can log in to MyGov and these are shown in the ATO section.
Still confused?
Call your fund. They can tell you exactly what cover you hold and what happens if it’s cancelled.
I cover this in more detail in my video, Superannuation Carry-Forward Contributions 2024, on the Edvest YouTube channel.
Explore free Australian finance education from Kyle Frost at Edvest.
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About the author: Kyle Frost is the founder of Millennial Independent Advice and Edvest. He previously worked in financial advice and now builds tailored financial models that show the levers, trade-offs and risks in big money decisions. Watch more on Kyle Frost's YouTube channel.
Connect with Kyle Frost: LinkedIn | Instagram (@kylefrostfinance) | YouTube | Edvest
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