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Australians should check their superannuation accounts to ensure they have adequate insurance cover under new reforms that come into effect tomorrow (1 January, 2014).
It is now compulsory for superannuation funds to provide death and total permanent disablement (TPD) insurance as part of the new MySuper scheme.
MySuper is the new super account that most funds will offer as the default option.
Slater and Gordon Superannuation Lawyer Andrew Weinmann said in his experience most people do not have adequate TPD insurance to cover them in the event they can no longer work.
“TPD insurance is the forgotten part of superannuation. A lot of people do not know they are able to access insurance through their super funds if they have to permanently give up work because of injury or illness. For that reason many people are not adequately covered,” Mr Weinmann said.
Research commission by Slater and Gordon in 2012 found only 47 per cent of Australia had heard of TPD insurance as provided through superannuation funds.
Under the MySuper scheme, employees will be offered minimum levels of death and TPD cover on an opt-out basis.
“Now is a very good time for you to review the insurance offered through your super fund and to ask yourself whether you have enough insurance to cover your debts if you are unable to work again.
“Having the right amount of insurance provides peace of mind and, in the event you need to use it, can protect you and your family from financial hardship,” Mr Weinmann said.