Many Australians have insurance inside their super account – the cost of which comes out of their super balance. It’s often seen as an added benefit that can help people in times of need.
Why insurance is being cancelled
Some people don’t realise they have insurance inside their super and may be paying for cover they don’t need or want.
So in 2019, some super laws were brought in to help protect people’s super balances from being unnecessarily eroded by the cost of insurance. One of these laws, called the Protecting Your Super package, requires super providers to cancel any insurance inside super accounts that have been inactive for 16 months.
A number of changes to superannuation laws proposed in recent federal budgets have now come into effect.
What’s an inactive account?
Generally, a super account becomes inactive if it hasn’t received a contribution or rollover for some time. And because of this, it’s likely that any insurance costs paid for via super could reduce the super balance. That’s why, if an account becomes inactive for 16 months, the insurance may be cancelled.
Before cancelling the insurance, super providers must tell affected members that their insurance may be cancelled and give them the opportunity to keep it.
Members can stop their insurance from being cancelled by:
- letting their super provider know they’d like to keep it or
- making a super contribution or rollover (of any amount) into the inactive account. (Making regular contributions can prevent an account from becoming inactive in the future.)
Contribute
If we’ve told you your insurance may be cancelled because your account is about to become inactive, then another way you can avoid the insurance cancellation, for now, is by making a contribution or rollover (of any amount) before the cancellation date we’ve given you. If you choose this option though, your insurance may still be cancelled if your account becomes inactive in the future. We’ll get in touch before this happens.
Eligibility rules and limits may apply, read more.
We’re not allowed to take requests to keep insurance over the phone, it must be in writing from you.