Hi
I am wondering how often a superannuation needs to review income protection. I have read that they should review every 5 years. Is this true?
Appreciate any input
Greetings digel. I am not sure what you are asking. Do you mean a self managed super fund, an industry fund or retail fund? Are you in the accumulation phase or pension phase?
Income protection usually means some kind of insurance but I can’t see how that relates to superannuation. Can you tell us more about it?
I am looking to get income protection from my superannuation fund. The last time they ask me if I wanted income protection was 22 years ago, but from what I have read, the law says that the superannuation company needs to review every 5 years. Hope that helps
Hi @digel, welcome to the community.
Any policy taken out prior to 1 October 2021 (which would apply to you since your income protection cover was first taken out 22 years ago), it is up to the policy holder to review the cover provided through the superannuation fund to determine whether the cover is still appropriate. See:
and
Life/Income Protection Insurance is also governed by the Insurance Contracts Act 1984. This act does not stipulate mandatory timeframes for when a insurance policy should be reviewed (either by the insurance underwriter or the policy holder.
Some insurance underwriters may review their policies from time to time and this may flow onto the policy holder. Such reviews should be outlined in any Product Disclosure Document (PDS) and also implications of such reviews.
You may be confusing a ‘review’ with the ‘5-year guaranteed renewable policy term’ requirements which is for policies taken out after October 2021. Such does not apply to you policy which is 22 years old. For more information see:
Welcome @digel. If you have not found the following Choice provides a number of articles on insurance attached to super. There are also links to several Government sites with further information.
The only references I’m aware of on reviewing insurances attached to super relate to existing policies. I’ve read it’s recommended to review the appropriateness and value of any attached policy on a regular basis, or if you have significant changes in circumstance. I’ve not seen any references that direct Super providers to actively approach members every 5 years to ask them to add a policy if they have previously declined or not had one. Perhaps you could point to the article that appears to say so? My Super fund provided regular correspondence seeking my reapproval or commitment to keep any insurances in place.
We all have different needs!
I was self employed for a period of my working life. I can see why one might want to have appropriate cover in those circumstances. Or possibly when employed as a casual or insecure employment. The conditions under which an income protection policy enables one to claim a benefit are limited. I could not see the same value in paying extra for insurance with Super when a full time employee. My personal views and not financial advice.
