Skip to main content

Are You About to Lose your Insurance?





In the 2018/2019 budget (released in May this year) the government talks about tailoring insurance arrangements. 
Basically, every time a person starts a job and opts to use the default, associated industry superannuation fund, they will likely have a group insurance policy (life insurance and/or tpd and/or income protection) automatically opened. 
What this means is that for someone that has multiple jobs over their career they can end up with multiple insurance policies and paying multiple premiums from their super funds. So, the governments idea to hold fewer automatic insurance policies, will allow Australians to grow their balances faster and protect low balances from being eroded entirely.
Make sense? For the most part it seems like a good idea. A 20 something single worker with no debt and no family may not need $500,000 in default life insurance cover. It is an unnecessary cost to their superannuation fund.
Some super funds have started to pre-empt the government’s announcement and are raising the minimum balance required in each fund to keep the automatic insurance in place. So effectively, once a fund slips below a certain amount, the insurance is cancelled. Again, this may make sense for some people but here’s the issue.
If you let these polices be cancelled, and in some cases, members aren’t being notified, you need to understand that you may not be able to obtain insurance elsewhere. 
Don’t assume that you’ll be able to get a new insurance policy down the track. If you’ve had a medical issue or injury an insurance company may apply a loading (increase the premium) or an exclusion (not cover you for certain conditions) if you decide to take out a new policy. 
In fact, you may not be insurable at all. Some occupations are viewed as uninsurable by insurance companies and even family medical history can cause an insurance company to refuse cover.
So be aware that whilst the government’s plan might have good intentions, it may not be wise to let your automatic policies run out without doing a bit of homework first. 
The automatic group policies set up by default within your super certainly aren’t the greatest product on the market. Infact they have many short comings. However they are better than nothing.
Some super funds are raising minimum required account balances as of July 1st 2018 which doesn’t leave much time to think about your needs. 
If you think you may have multiple funds, it may be in your interests to track them down, see what insurance cover you have and then talk to an Adviser like myself about planning the best way forward. Better still, let us do the heavy lifting for you and review each of your funds as part of our fact finding process.
Andrew O’Brien and Hindsight Group Pty Ltd t/as Hindsight Wealth Pty Ltd (ABN 88 168 442 528) are Authorised Representatives of Affinia Financial Advisers Limited ABN 13085335397 & AFS Licence No 237857.  The material contains general advice only and the consumer should consider the PDS and whether the product is appropriate prior to deciding to buy. 
Labels:
Location: 4/33 Remora Rd, Hamilton QLD 4007, Australia

Comments

Post a Comment

Popular posts from this blog

Don't Wait till you're in your 60's to see a Financial Adviser

Ask most 30-year old’s who their financial planner is and the typical response might be ‘huh?’ After all, financial advisers are for older people with plenty of money to invest, aren’t they? Well, yes, people nearing or in retirement will benefit from sound advice. But so will younger people. With the benefit of having time on their side, and with some help from an adviser, a 30-something can easily establish a wealth creation plan that can deliver a big payoff in the future. Harness compound interest It’s been called the most powerful force in the universe, and compounding returns – earning interest on your interest – can deliver dramatic results. Imagine that, at age 30, you commence a simple savings plan. You contribute $2,000 each year to an investment that delivers an after-tax return of 6% pa. After 30 years you will have contributed a total of $60,000, but your investment will be worth $158,116. The magic of compound interest will have delivered you an effortles...
Post a Comment
Read more

What to do if your job is made redundant.

Being retrenched from your job can be hard to accept. It is the sudden shock that catches most people but try not to take it personally. Redundancy is usually not about your personal performance; it’s the performance of your employer’s business, the industry sector in which you work, or even the global economy. Dealing with the key considerations below can help you take back control of your life and career. Take control Redundancy payment :  Genuine redundancy payments are given special tax treatment, including a tax-free amount related to years of service. Your lump sum payment might be your last pay packet for a while, so draw up a budget. This will help you identify areas where you can economise until you find a new job. Your financial adviser can help you work out the best use for any lump sum you receive. Mortgage :  If you have a home loan, contact your lender immediately. You may be able to adjust payments while you are out of the workforce. Centrelink :...
Post a Comment
Read more
Before you get excited (or not), I don't offer Pet Insurance, however I have received many questions about it.  So I thought I would offer some thoughts to consider for your independent pet insurance research. Australians are a nation of animal lovers.  According to the Australian Companion Animal Council, we have one of the highest incidences of pet - ownership in the world! Dogs and cats are our favourites; around 36% of Australian households own a dog, and 23% own a cat.  We're familiar with the companionship pets bring, and the social interaction they foster, but there are other benefits too: Lowered blood pressure and cholesterol; Increased physical activity; Strengthened immune system and reduced incidence of allergies and Children learn responsibility, empathy and respect. When considering a pet, you expect costs like food, bedding, the annual vet visit and so forth, but there are other costs you may not have thought about. Let's start at t...
Post a Comment
Read more