In February this year, the Government passed legislation which prevents trustees of APRA-regulated funds from providing insurance to members with inactive superannuation accounts, unless a member has specifically directed otherwise.
It is a common practice for many individuals with an SMSF to also have a secondary APRA-regulated fund which provides them with insurance.
This may be done for two key reasons:
- To access insurance policies provided through large superannuation funds which are often cheaper.
- To keep legacy insurance policies which may offer better benefits or lower premiums than new policies, especially for older members.
Disclaimer: The information contained in this document is provided for educational purposes only, is general in nature and is prepared without taking into account particular objective, financial circumstances, legal and tax issues and needs. The information provided in this article is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should assess its relevance to your individual circumstances. While SMSF Association believes that the information provided in this article is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001.