From 1 July 2019, new ‘Protecting Your Super’ laws come into effect. These laws include several measures designed to ensure that super account balances are not being unnecessarily eroded by fees and insurance premiums, particularly for accounts that have a low balance or have been inactive for a certain period. One of these measures relates to automatic cancellation of insurance cover for inactive super accounts. These rules prevent super funds from providing insurance cover to you if your super account is inactive, unless you specifically elect to keep your cover. Under these rules, an account will be considered ‘inactive’ if it has received no contributions or rollovers for 16 consecutive months.

The following Q&As provide some additional information about these changes:

Important: Please keep in mind that these FAQs are based on our understanding of current regulatory requirements and laws as at 4 April 2019. This information is not advice and provides information only. It does not take into account your individual objectives, financial situation or needs. You should read the Product Disclosure Statement and Reference Guides (or call us for a copy) and assess whether the information is appropriate for you. You should consider seeking professional advice tailored to your personal circumstances from an authorised financial adviser before making any decisions that may affect your financial future.

Important things to think about before deciding to keep, cancel or change your cover

Just like your home or car, your life and your ability to earn an income can be some of your most important assets. Having insurance cover may provide some financial protection if you are unable to work due to disability or if you die.

There may be some advantages of having insurance through your super, e.g. group premium rates may be more cost-effective than individual insurance rates, and paying for premiums through your super rather than your after-tax money may be tax-effective in some cases. However, it’s important to be aware that insurance premiums that are deducted from your account balance will reduce the amount of super that is available when you retire.

Your insurance needs can change over time so the cover you had in the past may or may not still be suitable for you today. For example, your needs for financial protection as a young single may be different to your needs if you have dependants or a mortgage. And if you’re downsizing or an empty-nester, your needs may be different again.

It’s important that you regularly consider and understand your current needs to make sure any insurance cover remains appropriate. This should include any cover for death and disability that you have through our fund, as well as any cover you have with another super fund or directly with an insurer.

It’s also important to understand the features of your cover, such as premium rates, when a benefit may or may not be paid, and exclusions that may apply. These features will generally be different between super funds or insurers, so you’ll need to consider what’s right for you.

You should also keep in mind that premium rates will generally increase as you get older.

What are these changes & why are they being introduced?

From 1 July 2019, new ‘Protecting Your Super’ laws come into effect. These laws include several measures designed to ensure that super account balances are not being unnecessarily eroded by fees and insurance premiums, particularly for accounts that have a low balance or have been inactive for a certain period.

One of these measures relates to automatic cancellation of insurance cover for inactive super accounts. These rules prevent super funds from providing insurance cover to you if your super account is inactive, unless you specifically elect to keep your cover. Under these rules, an account will be considered ‘inactive’ if it has received no contributions or rollovers for 16 consecutive months.

Who’s affected by the insurance changes?

You will be affected by these insurance changes if:

  • You have any insurance cover through your Accumulate Plus account – this could be cover for death, total and permanent disablement (TPD) and/or salary continuance (SCI), and
  • Your Accumulate Plus account has not received any contributions or rollovers for 16 consecutive months.

If both of these already apply to you, we will have to cancel your insurance cover automatically on 1 July 2019. If your account has been inactive for less than 16 months, we will cancel your insurance cover at the date you reach 16 consecutive months of inactivity.

If you don’t want your cover to be cancelled automatically, you will need to confirm to us that want to keep your cover.

What do I do if I want to keep my cover?

If you want to keep the insurance cover you have in Accumulate Plus, even if your account does not receive any contributions or rollovers for 16 consecutive months, you must notify us of your election. You can do this by:

  • Logging into your online account (FirstNet) from 8 April 2019 and following the links to: My account > Your super account number > Account Admin > Insurance. In the ‘Keep my insurance’ section at the bottom of this screen, click the ‘Next’ button.

You may make an election at any time. However, if we notify you that your insurance cover is at risk of cancellation, please ensure you take note of the date your cover may be cancelled, as well as the cut-off date/time in which to provide your election.

Once we receive your election, we’ll confirm this to you in writing.

What does making an ‘election’ mean?

An election will be your instruction to us that you don’t want your insurance cover to be cancelled automatically if your account becomes inactive for 16 months or more, either now or at any time in the future.

Once you provide an election, your cover will remain in place and we will continue to deduct insurance premiums from your account balance each month.

Of course, you are still free to cancel or reduce your cover at any time if needed. You can also increase your cover, transfer cover from another fund or policy, or apply for new cover, subject to the normal rules for cover in Accumulate Plus. Refer to our Reference Guide: Insurance Cover for more information

You should keep in mind that there may still be circumstances under the normal terms of insurance cover in Accumulate Plus where your cover may change or end. Refer to our Reference Guide: Insurance Cover for more information.

If I make an election, can I still change my cover in the future?

Yes. You are still free to cancel or reduce your cover at any time if needed. You can call us on 1800 023 928 to make these changes.

You can also increase your cover, transfer cover from another fund or policy, or apply for new cover, subject to the normal rules for cover in Accumulate Plus. Refer to our Reference Guide: Insurance Cover for more information

You should keep in mind that there may still be circumstances under the normal terms of insurance cover in Accumulate Plus where your cover may change or end. Refer to our Reference Guide: Insurance Cover for more information.

Can I make a contribution to my account instead of making an election?

Yes, if we receive a contribution to your account, either from you or from an employer, or you transfer super into your account from another fund, your account will no longer be considered inactive for the purposes of these rules.

However, you should keep in mind that the 16-month period will reset from the date the last contribution to your account is received. This means your insurance cover could be at risk again in the future if your account becomes inactive.

You can provide an election to keep your cover at any time, regardless of whether your account is active or inactive.

Check out our options for how you or your employer can contribute to your account or how to transfer super into your account.

Will any changes to my cover and/or premiums happen after I make an election?

In some cases, yes. Although your cover won’t be automatically cancelled if it meets the inactivity rules, there are some circumstances where other changes to your cover and/or premiums may occur automatically.

Depending on your category of membership, your amount of cover may change automatically. For example, if you are a permanent Group employee with cover linked to a multiple of your salary. In this case, when your salary increases or decreases, your amount of cover and monthly premiums will change accordingly.

Insurance premiums are also based on your age, so premium rates will generally increase each year on the first premium due date after your birthday.

There may also be circumstances under the normal terms of insurance cover in Accumulate Plus where your cover may change or end. For example, when you turn 70 (for death or TPD cover) or 65 for salary continuance, or if there is not enough money in your account to cover your premiums when due.

You can refer to our Reference Guide: Insurance Cover for more information on these circumstances.

Can I make an election only for one type or part of my cover?

An election to keep your cover for an inactive account will apply to all types of cover that you currently hold in your account.

If you want to change part of your cover, you can do so through our normal processes:

  • To cancel or reduce your cover, you can call us on 1800 023 928.

If my cover is cancelled automatically, can I turn it back it on?

No. If your cover is cancelled and you later decide you’d like to have cover through your account, you will need to apply through the insurer’s standard application and assessment process. This may require you to provided medical evidence and history to the insurer. The insurer may accept or decline any application.

What happens if my account is inactive and I don’t give an election to keep my cover?

If we don't receive an election from you to keep your cover and your account remains inactive, we must automatically cancel all cover in your account on the later of (i) 1 July 2019, or (ii) the date that your account reaches 16 consecutive months of inactivity. We’ll confirm to you in writing if your cover is cancelled.

No further premiums will be deducted from your account after the cancellation date and you will not be entitled to claim an insurance benefit in relation to any sickness or injury that occurs after that date.