Insurance policies in superannuation will be changed from a default framework to an “opt-in” basis for certain members from 1 July 2019.

The announcement from the 2018 federal budget is attempting to reduce the incidences of multiple insurance policies for individual which erode small super balances.

Importantly, individual clients of yours need to be made aware of these changes due to flow on effects this may cause. In particular, those individuals need to understand the process of staying “opted-in” to ensure their policy remains active during years of no income.

Source: Budget paper No 2, p 36.

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