It’s that time of year when we reflect on the past and make plans for the year ahead. If you have changed jobs in 2015 and now have more than one superannuation account, or have simply made it your New Years resolution to simply your financial affairs, you might be contemplating consolidating your superannuation into one fund in 2016. However before you take that step, you should consider how that might affect your insurance entitlements, as Karina Heywood, Superannuation Team Leader at Stacks Goudkamp explains.
“There are a number of key points to be considered prior to transferring and consolidating your superannuation account balance with a new fund,” Ms Heywood advises.
“Many Australians do not realise that superannuation policies generally have Income Protection and / or Total and Permanent Disablement insurance cover attached to them which policy holders can claim under if an injury or medical condition prevents them from working. The terms and conditions of such insurance policies can vary substantially between superannuation funds. It is therefore important to check your benefits under your policies before making a switch”.
Ms Heywood also warns that moving your superannuation account balance to new fund might limit or exclude you from being covered by your Total and Permanent Disablement insurance cover should you suffer an illness or injury in the future. This is because when transferring your superannuation to a new fund, a new policy of insurance will be issued by the new superannuation provider. This could result in you not being covered for certain types of injuries and pre-existing medical conditions, or having reduced benefits compared to your previous policy.
Conversely switching your superannuation fund might be advantageous to you, as the new fund may in fact have more generous insurance benefits. However it is important to check this so that you make an informed decision.
Superannuation and the insurance cover held under your policy can provide an important safeguard for your future. As such, it is very important that you consider your personal situation prior to consolidating your superannuation with a new fund.
If you have any queries in relation to a TPD claim or your potential entitlements under your superannuation cover, please do not hesitate to contact Karina Heywood, Superannuation Team Leader at Stacks Goudkamp, on 1800 251 800 or make an online enquiry.