What do you need to know about the July 1 changes?
Australians who have ignored their superannuation accounts and contributions are being urged to contact their super funds by June 30th, before the end of the financial year.
It’s predicted that nearly three million Australians will lose life insurance cover completely if they don’t take action in the coming days.
From July 1, the Federal Government is introducing its Protecting Your Super Package. As life insurance and superannuation are often combined, Australians who have not contributed to their funds in 16 months will have their life insurance policies switched off.
Indigenous Australians may also be among those worst affected by the changes, with many super funds unable to contact a significant number of those living in rural areas. 1
Many insurance companies recommend life insurance payments be taken directly out of superannuation, instead of paid upfront, due to the “out of sight, out of mind” benefit. However, some Australians have been negatively affected by this, losing thousands from their superannuation savings due to a lack of communication and transparency between their funds and their insurers. 2
The reasoning behind the Federal Government’s decision is to limit unwanted insurance premiums from unknowingly eating into retirement savings. However, those who need insurance but don’t regularly contribute to their super funds may lose protection, and be unable to retrieve it. It is expected that three million people will be affected by these changes.
Don’t want to be affected?
Here are three things you should consider doing before it’s too late:
- Contact your super fund and ask how the changes might affect you. Make sure that the type and level of cover you have is appropriate for your circumstances.
- Check the my.gov.au website to see if you have any funds you may have forgotten about, or may not know about
- Visit timetocheck.com.au for more information about your superannuation
Even though it’s never too late to get on top of your superannuation, no one wants to lose under the new super rules. With less than three business days to go before the end of the financial year, it makes sense to act now. Inaction could result in financial loss for you and your family.
Act before July 1.