Changes to insurance in super laws – what you need to know
February 26th, 2020
One of your First Super membership benefits – unless you cancel it – is automatic cover for four units of Death and Total and Permanent Disablement (TPD) insurance. This cover provides some financial protection should you no longer be able to work due to illness or injury, or in the event of your death.
The Putting Members’ Interests First (PMIF) reforms mean that First Super will be required by law to cancel a member’s insurance cover on 1 April 2020 if their super account balance has not been $6,000 or more from 1 November to 31 March 2020 UNLESS they tell us that they want to keep it.
This change applies to all superannuation funds.
Why is this happening?
The PMIF reforms aim to ensure members are not paying for insurance they may not need or know they have, and to prevent their super balances being inappropriately eroded by premiums.
Members’ insurance cover will not be cancelled on 1 April 2020 if:
- their First Super account balance goes above $6,000 at any point before 31 March 2020; or
- they opt in to keep their insurance cover by 31 March 2020; or
- they have undertaken any previous action with their insurance before 1 November 2019 that acts as an election under the reforms (e.g. applying for extra units of cover, opting in under PYS).
Informing affected members
We sent letters to members in late November 2019 if they were likely to be impacted by these changes.
Affected members will receive notifications through their mid-year statements and other communications in the coming weeks. We also have colleagues making outbound calls to ensure all members impacted are aware of the changes, as they risk losing their insurance.
If you want more details or help
If you think you or someone you know may be affected, you can find more details, Q&As and an online opt-in form on our dedicated PMIF web page.
You may want to get financial advice about your insurance needs before you make a decision. Our authorised Financial Planners* provide intrafund advice at no additional cost to members. You can request an appointment online.
Our Member Services Team is also here to help you on 1300 360 988 or email@example.com.
*First Super Financial Planners are authorised representatives of Industry Fund Services Limited (ABN 54 007 016 195, AFSL 232514).