Insurance is an important protection from life’s unexpected twists and turns and having insurance through your superannuation fund can be very cost effective. Knowing how changes in your circumstances may affect your policy can help make the process much smoother, should you need to make a claim.
Melissa O'Neil, Superannuation and Disability Insurance law expert has highlighted the top mistakes people may be making with their insurance policies.
6 common mistakes
1. Not letting the fund know you are working as a casual
There are a lot of funds that are now excluding casual workers, or those working less than 15 hours a week from cover under their policies. Ironically, those funds are often the ones that are specifically designed to benefit those in the retail or hospitality industries, which are mostly casual. You are considered a casual worker if you don’t have regular guaranteed hours and are not paid sick leave or annual leave.
2. Not telling the fund you have a new (and dangerous) job
There are some policies that exclude coverage if you are in a hazardous occupation, for example, a long haul truck driver, underground miner, a roofing labourer or builder working on platforms over 10 meters high. If you fit into this category, you could be paying premiums for insurance that just won’t cover you if you are injured and have to stop work. You also need to notify the fund that you have changed jobs. Not every employer uses the same fund and if you stop making contributions or your balance falls below a set amount your insurance can become null and void.
3. Not telling your fund you’re over 65
Many of us are working past the traditional “age of retirement” but some insurance policies won’t cover you if you are over 65. This is mostly because older workers are more vulnerable to illness and injury. Lots of policies have also not caught up with the 67 benchmark for retirement and our desire/need to work longer.
4. Not reading paperwork
Superannuation funds can change their insurance arrangements every so often. The fund is required to tell you about that, and might send you a letter or an email. Don’t ignore it, make sure that you read and understand any notices that you receive from your superannuation funds. If you aren’t clear about the changes then ring your fund for clarification. The change could mean the policy no longer suits your needs and you may not be able to make a claim when you need to in the future.
5. Forgetting about your mental health
If you have any sort of history of mental illness, including mild or temporary periods of stress, such postnatal depression or work difficulties for which you have seen your doctor or counsellor, you should check your insurance coverage. Many funds now exclude mental health issues as a claimable item, but are not specifically setting that out in their Product Disclosure Statements. If you believe your mental health could be a barrier to you working in the future then check it is covered by your policy.
6. Not disclosing ALL your medical history
If you are applying for insurance and are required to provide a detailed personal statement about your medical history – disclose everything, and we mean everything. Insurers have a nasty habit of engaging in what is called “post claims underwriting” – that is, they insure you based on what you tell them, often for years at a significant cost to you, and then when the time comes to make a claim, they dig into your medical history and allege some sort of “non-disclosure” offence and decline your claim.
How can Shine help?
If you are relying on insurances through your superannuation, make sure that you check the fine print, keep up-to-date on any changes and seek legal advice if you need help.
Shine Lawyers are super and disability insurance experts who can answer any questions you may have and help you get the most out of your superannauation. If illness or disability has stopped you from being able to work, contact us. We can help you access benefits through your superannuation, life insurance or other insurance policies.
Written by Shine Lawyers. Last modified: October 16, 2019.