Superannuation is a billion dollar industry in Australia. It is no wonder superannuation funds are saturating television and newspapers encouraging you to transfer your super over to them.
However, there are a number of critical points that you must be aware of before transferring and consolidating your superannuation savings with a new fund.
Most people are not aware that as part of their superannuation they hold Total and Permanent Disability “TPD” insurance to protect them in the event that they are unable to return to work due to sickness, illness or injury.
In the event that you transfer your superannuation savings from one fund to another, you could be reducing, limiting or even preventing yourself from being covered by your TPD insurance should you become injured, ill or sick in the future. When you take your superannuation to a new fund, a new policy of insurance is issued. This could result in you not being covered for certain types of injuries or pre-existing injuries or illnesses, even in circumstances where you weren’t aware that you had a pre-existing condition.
Superannuation funds and TPD insurance provide important safeguards to protect your future. So, it is critical that you consider your personal situation before you take the leap and transfer to a new fund.
To protect your insurance coverage, it’s best to follow these steps before transferring your superannuation savings to a new fund:
- Ask for a copy of the TPD policy of insurance
- Ask if any types of injuries are excluded under your policy
- Get written confirmation that any pre-existing injuries or illnesses you suffer from are covered under the policy; and
- Seek independent advice from a certified financial planner to ensure that the product suits your personal circumstances.
Written by Will Barsby
Written by Shine Lawyers. Last modified: September 26, 2018.