Professional Post from NextGen Wealth Solutions

Just because you are unhappy with the investment returns, this is no reason to put you or your family’s future at risk by losing your insurance cover in the process of changing superannuation funds.

A good professional financial planner will assess your insurance needs before changing superannuation funds.

Ok, so you have decided to move to a new superannuation fund that you feel better meets your needs and might have more options or lower fees. That’s fine, but one of the things you should look at doing is protecting any insurance cover you have in your current superannuation fund. You can keep some money in your current fund to pay for ongoing insurance premiums or take out replacement insurance cover in the new fund.

Why address insurance before transferring your superannuation?

  1. It may be too late once you have rolled your funds, so you should assess your insurance needs before moving.
  2. Your existing fund may have been underwritten (priced and medically assessed) under Group terms which are more competitive and relaxed than stand alone policies. If you can keep a low balance in that fund to cover premiums you may save considerable money over time.
  3. Your health may have changed since you took out the cover and you may not be able to replace the insurance.
  4. You may now be self employed or in a more dangerous occupation ( e.g. Miner) and may not be able to get cover for your new occupation or restricted cover. Some insurers restrict cover for those working from home under Income Protection policies.
  5. It may have been a number of years since you took out the cover and the rates for someone being re-underwritten at your current age may be considerably higher than those you receive because you have been an ongoing insured person.

So what can you do to maintain your Insurance cover when transferring funds

  1. Get a comparative quote for a replacement cover in your new fund
  2. You could leave enough money in your current fund in a cash option to cover the next 3 years premiums. When you review your needs in later years you can either rollback some more funds to cover the insurances or seek alternative arrangements in the meantime.
  3. If you are moving to another fund then look for “Transfer Terms” where a new insurer may accept the transfer of the cover without going through the full underwriting process.

While you are doing a review you should take the time to consider options like Level Premiums, placing cover outside of Superannuation or splitting the cover.

Not sure why you need cover or what types of cover you need?

Read our guide “How important is your peace of mind” and contact NextGen Wealth Solutions for a review of your insurance and superannuation options.

This is a professional post – If you would like to see your blog posts published at humble savers, please review our Professional Posts page – Thank you.

General Advice Warning

The Information on this page has not taken into account your financial situation, needs or objectives. Before acting upon any advice, you should consider whether it is appropriate for you. If the advice relates to a financial product, you should obtain and consider the Product Disclosure Statement before making a decision in relation to the product

NextGen Wealth Solutions is a member firm and corporate authorised representative of Genesys Wealth Advisers Ltd.


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