Sweeping Changes to Insurance through Superannuation

A recent important legislative change that received Royal Assent and takes effect from 1 July 2019. This change relates to insurance held through superannuation (other than an SMSF or small APRA fund), where the member is deemed to be “inactive”. Whilst the changes don’t take effect until 1 July 2019, it is possible you may have received letters from your superannuation funds notifying you (by 1 May 2019) of the impending changes.
Under the changes, superfunds are not able to offer insurance coverage (on an opt-out basis) to many members if the member has an inactive account, irrespective of the size of the account balance.
An inactive account is defined as one that has not received a contribution or rollover in respect of that member for a continuous period of 16 months. If you have insurance that was put in place many years ago and has continued to be held, but where you are no longer making contributions to that account, it is likely you will be impacted by this change.
It is important to consider your situation and consult your financial adviser to discuss the appropriate action to take, to ensure that your insurance policies remain in force.

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