Insurance and super
The last 12 months has seen significant change to insurance within superannuation, and we’ve tried to keep you informed every step of the way. Today, we highlight some more of these changes and the benefits of insurance.
You insure your car and take our travel insurance, but nothing is more important than your life and your ability to make a living. It would make good sense then to insure your greatest asset – you!
As your circumstances change, you can update your insurances at any time to make sure you’re covered to provide a safety net for you and those you love most.
Many Australians, however, don’t have enough insurance and unfortunately don’t realise this until it’s too late:
- 50% of Industry Super Fund members are under insured by $100,000 for life insurance
- 37% of Industry Super Fund members believe life insurance is a low priority given other financial commitments
- 74% of Industry Super Fund members are under insured by $100,000 for Total and Permanent Disability (TPD)
- 83% of Australians have insurance for their car, but only 31% have income protection (IP)1
Why do I need insurance?
There are certain life stages that prompt Australians to look into their death, TPD and IP cover such as marriage, buying a home and/or having a child. If you’re adequately covered, insurance can help protect and provide for you and your family during times of unexpected hardship, even if you’re young and healthy now.
With a Key Life Event application form, you can apply to add additional cover to your Death and TPD if any of the above has happened to you. Other key life events include divorce, death of a spouse, child’s first day at primary or secondary school, or the commencement of a carer allowance payable by Centrelink.
You can log into your Member Online account at any time and check your level of cover to make sure it suits your needs. The amount you should be covered for will depend on your individual circumstances, but our insurance calculators, found here and here can be a good starting point to help you. A major benefit of having insurance while you're young is your premiums are lower.
Protecting your super
Something to be aware of is the recent changes to superannuation legislation entitled “Protecting Your Super”, which means you might lose your insurance automatically as a result of having an inactive account. 70% of people have their life insurance cover in super, yet more than half don’t realise they’re at risk of losing it2.
An inactive account is one where Vision Super (or your other super fund) has not received a contribution or a rollover from another fund for 16 continuous months. We will write to you and let you know if you are about to lose your insurance so please keep an eye out for this information and let us know if you want to maintain your cover.
Not only is your insurance at risk of ceasing, but if your insurance is cancelled due to 16 months inactivity and your account balance is less than $6,000, your benefit may need to be transferred to the Australian Taxation Office. For more details on inactivity and these changes, call one of our friendly contact centre staff on 1300 300 820, Monday to Friday between 8:30 am and 5 pm.
Have you had a salary change?
We know a lot of employees receive salary increases on June 30 and often need to adjust their IP to match. If you’ve had an increase to your salary due to EA increase or you’ve been in receipt of a pay rise, you can update your IP insurance by a maximum of 3 units within 60 days without going through underwriting.
All you need to do is fill out an insurance form and attach a letter from your employer confirming your new salary and the date you were notified of the salary increase. Log in or contact us and we’ll tell you how much cover you currently hold and what to do.
The insurance code
Vision Super has started to implement the Insurance in superannuation Voluntary Code of Practice (the Code) from its commencement on 1 July 2018. We believe it will help our members to better understand and make more informed choices about their insurance cover.
The Code is the superannuation industry’s commitment to high standards when providing cover to members. It’s a first for our industry and introduces standards that will provide greater transparency and consistency across the superannuation industry. Vision Super already meets many of the Code’s standards and we’re developed a transition plan for the remaining items.
For new members, we’ll also provide clearer information about automatic insurance and the options available.
We’re here to help
For more information go to visionsuper.com.au/insurance or contact us on 1300 300 820 Monday to Friday 8:30am to 5:00pm for an appointment with one of our financial planners.