We know through clients of our Pro Bono Program just how hard a cancer diagnosis can hit. One of the main tasks our volunteer financial planners undertake is helping cancer patients access insurance attached to their superannuation policies. This is often a welcome surprise for people affected by cancer, many of whom don’t even know the insurance exists. This boost to their bank account during a very difficult time provides immeasurable emotional and practical relief as some of their financial burden is lifted and they can instead focus on their health. However, legislation changes coming into effect may mean that accessing much needed life or TPD insurance attached to superannuation is no longer an option for some people facing significant health conditions.
To give some context, legislation was recently introduced to protect Australians’ superannuation savings from undue erosion by fees and insurance premiums. These amendments include cancelling insurance policies attached to superannuation funds that are considered inactive (have received no contributions or rollovers for more than 16 months). Funds were required to notify anyone with an account with insurance that it will be cancelled. People have until 30 June to either opt in to keep their insurance, or to make a contribution to their account so that the insurance remains.
There are many instances when cancer patients or carers will have taken significant time off work for treatment or to care for someone, resulting in no contributions for 16 months. These people might seek to access life insurance or total and permanent disability insurance (TPD) attached to their superannuation, however after 1 July this insurance will be cancelled and unavailable to them at a time when they are most in need. Also, there are patients who have taken a lot of time off work but may not yet be eligible to access insurance. However, if their insurance is cancelled, they will not be able to claim in the future once they become eligible.
Many of the people we assist don’t know that there is insurance attached to their superannuation fund. Additionally, people may not be opening mail or reading emails from their superannuation fund, particularly while going through treatment or at another stressful time. So, it’s likely that those affected will not be aware this insurance will be cancelled and could be left in the lurch at a time when they need support the most.
To any readers who think this news might concern them, we recommend you contact your superannuation fund before July 1st to check what sort of insurance might be available to you and how you can continue your cover.