Pressure to consolidate superannuation accounts could cause Australians to risk losing valuable insurance policies, Maurice Blackburn lawyers have warned.
Australians are regularly bombarded by advertising from financial services companies urging them to roll all their super into a single account, said Maurice Blackburn associate Andrew Weinmann.
While this may be the best way to manage fees across several accounts, Weinmann cautioned people against dropping their insurance cover without first considering their individual and family needs.
“Many super funds contain insurance cover that is cheaper than personal insurance. The cover can be lump sums, for death or total and permanent disability (TPD) or monthly payments for temporary disability,” he said.
Many group super funds such as industry funds provide automatic disability insurance cover (up to a certain limit) without the need for a health questionnaire, he said.
“This means that even if you have a pre-existing injury or sickness you can usually get insurance cover and it won’t exclude cover for the pre-existing disability,” he said.
Consumers should always check the insurance within their super fund before consolidating accounts because it could make a huge difference both financially and emotionally, Weinmann said.
