Retirement
The insurance and super changes you need to act on now
Your insurance could be deemed inactive if you don’t act before 1 July.
The insurance and super changes you need to act on now
Each year, more than $500 million in life insurance claims is estimated to be paid to Australians with “inactive” superannuation accounts.
In an effort to protect consumers with inactive superannuation accounts, the government is introducing Protecting Your Superannuation laws, which are intended to protect Australians from paying for unnecessary insurance cover.
While the policy intent is to protect consumers, there can be adverse consequences for those who don’t realise their account is inactive, and assume their insurance cover will continue.
AIA Australia CEO Damien Mu said it was important that everyone is aware of the changes to ensure that families are not left without life insurance.
“Our concern is that a large majority of impacted members won’t be aware of these changes until it’s too late, only discovering that they are uninsured at their time of greatest vulnerability after a serious event has occurred,” said Mr Mu.
Mercer Australia’s CEO, Ben Walsh, is in support of the new government regulations; however, he understands the potential consequences of the new legislation.
“The changes are a step forward in protecting members from unnecessary balance erosion. They address the duplication of insurance fees resulting from multiple accounts, protect small balances and save young people from paying insurance coverage that they may not need,” said Mr Walsh.
“Insurance in super, however, can also be a valuable benefit for many members and there are some who may be negatively impacted as a result of unintended consequences brought about by the changes, such as members who have intentionally left their super savings in an ‘inactive’ account to retain access to a specific insurance coverage,” said Mr Walsh.
How to prepare for the changes
To ensure they are protected, AIA and its partners have launched a click, check and protect initiative to provide Australians with the necessary tools and information they need to better understand their cover, and to determine their needs.
“We understand that members can sometimes be less engaged with life insurance based on over-optimism about their risk, or apathy, which is why default insurance in superannuation is by far the most sustainable system for mass consumer protections, benefiting everyone in society by providing cover to all,” said Mr Mu.
RELATED ARTICLES
About the author
About the author
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more
Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more
Superannuation
Rest super fund reports 11.19 per cent return for 2024
Rest superannuation fund delivered an 11.19 per cent return in its MySuper Growth investment option for calendar year 2024, marking two consecutive years of positive returns. Read more
Superannuation
Actuaries propose three-tier superannuation tax reform
The Actuaries Institute has outlined major reforms to Australia's $4.1 trillion superannuation system, proposing uniform tax rates and new levies on high retirement withdrawals. Read more
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more
Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more
Superannuation
Rest super fund reports 11.19 per cent return for 2024
Rest superannuation fund delivered an 11.19 per cent return in its MySuper Growth investment option for calendar year 2024, marking two consecutive years of positive returns. Read more
Superannuation
Actuaries propose three-tier superannuation tax reform
The Actuaries Institute has outlined major reforms to Australia's $4.1 trillion superannuation system, proposing uniform tax rates and new levies on high retirement withdrawals. Read more
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
