At any point in your career, it’s essential to take a serious look into financial…
Superannuation is a practical financial option if you want to have a reliable source of income after you retire. While it may seem difficult to navigate at times, you can’t deny that the benefits of a super will always outweigh the minor complications, so much so that Australians do not hesitate to invest in their super.
With that said, a source of money isn’t the only thing being offered by a super. One of the things that you may acquire from it would be insurance. There are both similarities and differences between a super’s insurance and an external plan, and if you plan to funnel all your benefits from one source, you may decide to apply from via one source over the other.
Now, just because they may have similarities doesn’t mean that they are both the same. Even if you are familiar with the ins and outs of external insurance, you may still have no idea what specific coverage a super’s insurance has. In such a case, you may need to take note of the following pointers for your reference.
Take note of them so that you will have no problem understanding the other aspects of your superannuation.
1. Your Super Contribution May Affect the Insurance Plan
If you or your employer haven’t contributed to your super for more than 16 months*, chances are the insurance component will be cancelled. This is because super providers tend to treat unpaid super funds as abandoned or lost super. Be sure to prevent your covers from being disabled and be consistent with your payments.
You may be able to catch up if you are only a few months behind on your contributions, but once it reaches 16 months, then you may have to start from scratch.
* Cancellation terms may vary. Ensure you read your Super Fund’s PDS and are aware of your rights/responsibilities.
2. Your Super’s Insurance Has Some Crucial Covers
A super’s insurance may offer life and total and permanent disability (TPD) coverage; plus in some cases, they even have income protection or salary continuance cover.
If you are interested in investing in those, make sure to approach your super provider or your payroll/HR so that they will be able to accommodate and assist you with the process. It is essential to sign up for those as early as now, just in case something unexpected happens.
However, super funds do not offer Trauma or Critical Illness insurance. You will need to apply for this with an insurer outside of super.
3. Your Super Must Have More than $6,000
This may seem steep, but this can be attributed to the changes brought about by the Protecting Your Superannuation Package Act of 2019. It may seem unfair, but this is all related to the very first pointer, wherein an inactive super is determined if it hasn’t been paid for the last 16 months or has an amount that is less than $6,000.
Be sure to maintain the right amount so that you will be able to keep both your super and your insurance active. All of it will go to waste if you will ignore this part of the process.
Maintaining Insurance inside of Superannuation
Your superannuation has its insurance covers, and you must make the most of it to enjoy its many benefits. By understanding the technicalities and the amounts required in maintaining your account, you can be sure that your contributions will not go to waste.
Take note of the covers, be consistent with the payments, and maintain the needed value so that you may receive all the benefits by the time that you retire.
To know more about tips in managing your finances during your retirement years, check out these posts:
- 3 Unique But Effective Investment Opportunities in Australia
- Investing in Your 30s or 40s: Here’s What You Need to Know
For the most-trusted superannuation financial advice and insurance advice, look no further than our experts here at Coastal Advice Port Macquarie. We are a financial agency specialising in retirement planning, insurance, aged care, among other things. Contact us today – let us discuss your future financial options.
Disclaimer: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Coastal Advice Port Macquarie, and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.