The Government has recently passed new legislation that now requires you to opt-in by 1 July 2019 to retain the insurance cover you have in your superannuation fund.
If your superannuation fund account has not received a contribution from you or your employer or a rollover in the previous 16 months, superannuation funds are required by law to discontinue your cover.
This new legislation applies regardless of your superannuation fund's balance and applies to all types of insurance; life insurance, total and permanent disability (TPD) insurance and income protection insurance.
The insurance opt in requirement is part of a reform package called Protecting Your Super Package that commences on 1 July 2019 and includes:
• Insurance becoming opt-in for members whose accounts have been inactive for 16 months
• Fund members with balances under $6,000 whose accounts have been inactive for 16 months will have their accounts paid to the ATO, who will then chase taxpayers to consolidate their superannuation accounts
• Fee caps will be imposed on certain fees for account balances under $6,000
• Exit fees will not be charged for moving money from a superannuation account