Insurance cover in superannuation is important when it comes to protecting yourself against unforeseen health events.
Superannuation not only helps you save for retirement but can also include insurance cover to provide for you in times of illness or injury, or even to support your loved ones if you were to pass away.
Most super funds in Australia will offer insurance cover such as Death, Total and Permanent Disablement and Income Protection.
But it might surprise you that insurance cover is not automatically applied to your account unless you have met certain criteria. In other cases, some insurance covers which are paid for by your employer, could be compulsory under your work arrangement.
Putting Members Interests’ First (PMIF) legislation was introduced in April 2020 and is designed to protect members’ superannuation account balances from erosion by unnecessary insurance premiums. The legislation requires super funds to automatically cancel or restrict cover, where an account balance is either too low (less than $6,000) or the member is too young (under 25) or where a super contribution has not been received for more than 16 months.
Unfortunately for members in a high-risk occupation, such as electrical workers, superannuation may be the only option for them to obtain suitable, affordable insurance cover. These insurances are generally designed to help cover financial obligations, such as mortgage, rent, utilities or other financial commitments during periods when the member cannot work. Finding yourself unexpectedly without an income could mean missed payments and financial stress for you or your family.
Do your younger employees currently have cover?
As mentioned, PMIF legislation means super funds can only commence insurance cover on accounts where a member has reached a balance of $6,000 and is 25 years or older. This legislation will impact each new member of a super fund but has a larger impact on apprentices and younger workers who are just starting their careers. These younger workers often don’t have the minimum balance requirement to automatically receive cover, and their lower incomes mean it can take longer to build up their super balance and qualify for insurance.
Each super fund will have a different process, but at Brighter Super, members can opt-in to receive these insurances without meeting the age and account balance criteria. It is as simple as completing a form, which includes a few personal details, choosing which insurances to opt-in to and emailing it back to us. This means our members can rest easy, knowing they have financial support when they need it most.
As a proud supporter of Master Electricians Australia, Brighter Super is here to help your employees navigate their insurance options. Whether it be registering for our Insurance in Super webinar or having one of the Brighter Super team meet with your team, we are here to help. You can visit our website for information on about our upcoming webinars . This page is regularly updated with new topics and new dates.
Workplace visits
We love catching up with our employers and members face to face whenever we can. If you are interested in having one of the Brighter Super team come to your workplace and chat to your team, please email our Fund Services Manager team at [email protected].
This article provides general information and advice only. It has been prepared without taking into account your individual objectives, financial situation or needs. You must not rely on this information alone as a sole or primary source of advice or guidance for the purpose of making decisions about your superannuation options.
If you wish to make any changes to your superannuation, you should obtain a copy of, and consider, the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD), and seek financial advice before making any decisions. The PDS and TMD for Brighter Super can be found on our website www.brightersuper.com.au/pds-and-guides
