National law firm Slater and Gordon is calling on Australian workers to check their retirement insurance is right for them, before further changes from the federal government.
Workers should have a default superannuation account that follows them from job to job thanks to super stapling legislation set to come into effect on July 1 if the draft Your future, your super regulations. is adopted by Parliament.
Slater and Gordon practice group leader Sarah Snowden said the changes would prevent workers from paying multiple insurance premiums and account fees, but could also have unintended consequences.
âSome total and permanent disability (TPD) and life insurance policies are industry or employer specific. A policy may exclude jobs considered hazardous based on working conditions, or offer benefits only to those employed in a specific industry, meaning that a person changing jobs might not be eligible for a claim under the title. from her own policy after paying premiums if she is injured or ill while working in this role, âsaid Ms. Snowden.
âPeople need to think hard and check that their current super insurance policy is the right one for the type of job they’re going to be doing in the future. New super accounts will no longer be created every time a worker changes jobs, so injured workers will not have the multiple insurance policies in multiple funds to rely on to make a claim as they do. had already done so.
“The speed of deployment of the proposed stapling legislation is worrying and leaves little time for people to think about their options.”
Ms Snowden said previous legislative changes that required members to choose to keep insurance when they had a low balance, failed to make regular dues, or were under the age of 25 had resulted in many members not holding plus crucial income protection, total and permanent disability. (TPD) or life insurance coverage.
âPeople often forget that they have insurance benefits that they can access if they get sick or injured and can no longer work, within their super fund. It is arguably the most cost effective and affordable insurance for people and it can be devastating to learn that you are no longer entitled to this insurance, âshe said.
Ms Snowden said it might be possible to reinstate your insurance if you find it has expired, but it needs to be done quickly.
âDepending on your fund and your insurance policy, you usually have about 60 days to reinstate your insurance if you find it has been canceled, without having to do a medical exam and reapply. The problem is, by the time people realize it, it is too late. she said.
Ms Snowden also warned house hunters against using super funds to buy a home after the federal government announced its First Home Super program would be expanded, allowing people to voluntarily add up to 50,000 $ to their super starting next year, up from $ 30,000.
“This might save you for a deposit sooner, but it will still be important not to let your balance go so low that you don’t have the funds to pay your PDT or life insurance premiums. “she said.