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Changes to Insurances in superannuation

Announcement posted by Future Assist SMSF 26 Aug 2014

There are various changes to Insurances in superannuation from July 1 2014, read more

Here at Future Assist, we see insurances as an important part of any active SMSF investment strategy as it protects the serviceability of your investments should you become incapacitated in anyway. Superannuation investments are no exception. There are some changes that are happening to insurance held inside superannuation and these changes are going to be effective from the 1st of July 2014. 

What it’s going to mean is that there will be a limit on some of the types of insurance covered at superannuation funds including Self Managed Superannuation, will be committed to take out for their members. So as a result insurance cover inside super will only be allowed to be owned within super where it is consistent with the superannuation condition of release definitions. Now these are death, terminal illness, permanent or temporary incapacity. Subject to some transitional rules the new requirement will apply to people who become members of the Superannuation Fund from the 1st of July 2014.  

The regulations will also prevent Superannuation Funds from providing additional insured benefits unless they’re supported by an insurance policy from the insurer. So that is, a fund can no longer self-insure subject of separate transitional rules that might apply. Now these amendments will apply to those who joined the super fund from the 1st of July 2014 as well as to existing fund members who were not already covered by these types and benefits prior to that date.  The changes won’t apply to members who join the fund before the 1st of July and who were covered in respect of these insurance benefits before that date. So existing covers such as own occupation TPD, will be allowed to continue beyond 1st of July 2014 where the member was actually covered by an insurance policy in respect of that prior again to 1 July 14. In addition existing members who meet the above exception will be allowed to vary their level of cover. So for example cover could be increased or decreased after the 1st of July 2014.

If you are looking for more information regarding self-managed super funds or insurances inside or out of superannuation, it is recommended that you speak to one of our licensed superannuation advisers. Future Assist specialise in assisting Australian’s with self-managed superannuation administration, investment and risk advice to suit your retirement goals.

 

It is important to note that the above is not provided as personal advice as it does not take into consideration your personal situation, current lifestyle requirements or retirement planning needs and goals.

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