Insurance is a beneficial addition to a super account when it’s right for your circumstances. A new law now requires super funds to cancel insurance inside super, once the account has been inactive for a continuous period of 16 months. Your super fund will then cut off your death and total and permanent disability (TPD) cover. For you, this means that any benefits you may have had through your super cover will stop.
This is very important, particularly with your employer contributed superannuation because if you are no longer employed, the payments will cease, and you will no longer be covered for injury/illness or death. The problem in losing your insurance cover is that you may not get the same broad cover when you reactivate it after you have lost it.
So, if your super account has had no recent contributions, all insurance may be cancelled on or after 1 July 2019 UNLESS you tell your super fund you wish to continue and if possible, you may also need to personally make contributions to your fund. We strongly recommend that you do so, if you want to protect your rights.
Your super fund is required to inform fund members that they are at risk of having their insurance cancelled. You then have the option to retain your insurance cover. If you have moved and you haven’t updated your address with them, you should contact of your superannuation fund to discuss this with them.
