Many Australians have insurance inside their super account – the cost of which comes out of their super balance. It's often seen as an added benefit that can help people in times of need.

Why insurance is being cancelled

Some people don’t realise they have insurance inside their super and may be paying for cover they don’t need or want.

So in 2019, some super laws were brought in to help protect people’s super balances from being unnecessarily eroded by the cost of insurance. One of these laws, called the Protecting Your Super package, requires super providers to cancel any insurance inside super accounts that have been inactive for 16 months.

A number of changes to superannuation laws proposed in recent federal budgets have now come into effect. Learn more with AMP about what the super changes mean for you. Learn more about changes to super laws.

 

What’s an inactive account?

Generally, a super account becomes inactive if it hasn’t received a contribution or rollover for some time. And because of this, it’s likely that any insurance costs paid for via super could reduce the super balance. That’s why, if an account becomes inactive for 16 months, the insurance may be cancelled.

Before cancelling the insurance, super providers must tell affected members that their insurance may be cancelled and give them the opportunity to keep it.

Members can stop their insurance being cancelled by:

  • letting their super provider know they’d like to keep it, or
  • making a super contribution or rollover (of any amount) into the inactive account. (Making regular contributions can prevent an account becoming inactive in the future.)

How to keep your insurance

If we’ve written to let you know your insurance may be cancelled under super laws, please read the important details listed below before you act.

To keep your insurance, you can do any one of these before the cancellation date provided in the letter or email, we sent you:

Online

Fill out this online election form using your account number

Email

Download and complete this paper form using your account number.

Take a photo or scan the form, then email it to askamp@amp.com.au

Mail

Download and complete this paper form using your account number. Then send it to:

AMP Limited
PO Box 300
PARRAMATTA NSW 2124
(no stamp required)

Contribute

If we’ve told you your insurance may be cancelled because your account is about to become inactive, then another way you can avoid the insurance cancellation for now is by making a contribution or rollover (of any amount) before the cancellation date we’ve given you. If you choose this option though, your insurance may still be cancelled if your account becomes inactive in the future. We’ll get in touch before this happens.

Eligibility rules and limits may apply, read more.

We’re not allowed to take requests to keep insurance over the phone, it must be in writing from you.

Tip: you might like to do a super search, to find out if you have any lost or unclaimed super that could be rolled into your super account. This will reactivate your account.

Important details before deciding

Use this guide to understand more about what the new super laws could mean for you.

The super reforms

 Why is this happening?

Many Australians have insurance inside their super account – the cost of which comes out of their super balance. Yet some don’t realise they have this insurance and may be paying for cover they don’t need or want.

These super law changes aim to protect peoples’ retirement savings by preventing super balances from being eroded by the cost of insurance when it’s not wanted, as well as the cost of other fees. 

What’s in the new laws?

There are different parts:

The first part, called Protecting Your Super, focuses on super accounts which are inactive (haven’t received a contribution or rollover) for 16 months. 

If an account becomes inactive for 16 months, the insurance inside the account must be cancelled unless the client requests to keep it. 

What does this mean for me?

 

The cancellation can mean different things for each type of insurance.
  • By no longer having Life insurance (also known as death cover), if you die, your dependents or other beneficiaries will not receive insurance benefits from your super account.
  • By no longer having Total Permanent Disability (TPD) insurance, you will not receive any lump sum benefit if you become permanently disabled due to illness or injury.
  • By no longer having Temporary Salary Continuance (also known as Income Protection), you will not receive a monthly benefit (up to 75% of your pre-disability income and subject to a waiting period) if you are not able to work for a period of time due to illness or injury.
  • By no longer having Temporary Total Disablement Cover, you won’t receive a monthly benefit (up to 75% of your pre-disability income and subject to a waiting period) if you become Temporarily Totally Disabled due to illness, accident or injury.
What else do I need to know?

It’s important to understand your insurance, to know what’s right for you. Here are some things to think about:

  • It can be complicated for certain people to get insurance. Eg, if you have a pre-existing medical condition and your current insurance is cancelled under the new laws, you may not be able to reinstate your cover to the same benefit level or get insurance elsewhere at the same cost.
  • Product features like waiting or benefit periods can also vary between policies. Please check your most recent statement or product disclosure statement.
  • Payments for insurance inside super come out of your super balance, which means the balance can be reduced by costs over time. This is especially important when an account is inactive or has a low balance. This could reduce the amount of money available for you in retirement.
  • Make sure you understand the details of insurance inside super.
  • Some employers negotiate special deals for their employees, which you could be benefiting from.
  • You can get an idea for what your insurance needs might be by using our insurance calculator.
  • Your financial adviser can help you determine what insurance is right for your circumstances.
If my insurance is cancelled, can I get it back again?

If you do nothing, and your insurance is cancelled as a result, you may be eligible to reinstate your cover. Alternatively, you may be able to apply for new cover and supply health information. This information would need to be assessed as part of your application. It may not be possible to reinstate your insurance on the same terms or at the same price. And, in some circumstances, you may not be able to reinstate your cover at all.

It can be complicated for certain people to get insurance cover. For example, if you have a pre-existing medical condition or work in a dangerous occupation.

What if I want my insurance cancelled earlier? If you wish to cancel some or all your insurance earlier than the cancellation date provided, let us know on 1300 363 267.
What if I have more than one account?

If you have more than one AMP super account with a balance below $6,000 and you’d like to keep the insurance in each, you’ll need to act in one of the ways provided, for each account.

You’ll receive a notice from us about the insurance in your account if you’re impacted by these laws.

Remember, if you have two accounts with the same type of insurance (from one or more super providers), you may be paying for insurance you don’t need. In particular, for Temporary Salary Continuance (Income Protection), you will most likely only be able to claim up to 75% of your pre-disability income (offsets may apply), regardless of whether you hold it in two accounts.

It might be a good idea to speak with your financial adviser about super and insurance to meet your personal circumstances.

What are my options?

How should I respond?

It depends on what you’d like to do:
  • If you decide to keep your insurance, you can fill out the online form or paper form provided, or contribute to your super. Details are provided in the notification we sent you.
  • If you decide you’d like your insurance cancelled, you don’t need to do anything. Your insurance will be cancelled on the cancellation date provided. Otherwise, you can cancel your insurance before then by contacting us on 1300 363 267.
Is completing the form to keep my insurance the same as contributing into my super?

No.

The request form tells us you want to keep your insurance, even if you have a low balance or the account becomes inactive in the future. We won’t need to ask if you’d like to keep it again.

Making a contribution to your super account

On the other hand, if your account is about to become inactive, making a contribution or rollover (of any amount) into your super account before it becomes inactive, means your insurance will not be cancelled for now. However, your insurance may be cancelled in the future, if your account doesn’t receive another contribution or rollover for 16 months.

Eligibility rules for making contributions also apply, learn more. Find out more about making after-tax contributions.

What happens if I do nothing?

If we don’t hear from you in one of these ways before the cancellation date provided, your insurance will be cancelled.

We’ll write to you to let you know if this happens.

If you decide to keep your insurance, you can fill out the online form or paper form provided or contribute to your super. These details will be in the notice sent to you.

What if I’ve just put money into my super?

If you’ve recently made a contribution or rollover into this account and the balance reached $6,000 or more, your insurance will not be cancelled for now.

Your insurance may still be cancelled in the future if the account doesn’t receive a contribution or rollover for 16 months. We’ll get in touch before this happens.

Why does my election refer to being aged 25 years and having a balance below $6,000? Changes to super laws mean insurance cannot be provided automatically if your balance is below $6,000, you’re under age 25, or your account is inactive (no contribution or rollovers) for 16 months. We’ve combined these elections into one. Learn more.

Making insurance claims

Can I still make an insurance claim on events that occurred before the cancellation date?

Yes.

Please call us if you have any questions.

What happens if I already have an insurance claim?

If you have a claim with us, these laws won’t impact your claim, and we’ll continue to support you throughout the process.

However, you'll still need to tell us if you'd like to keep your insurance, claim on another insurance type (TSC, TPD or Death), or claim on the insurance inside your super account in the future. Call us for more information on 1300 363 267.

More information

How do I find out how much super and insurance I have?

Login to My AMP using your account number.

You can also find your super and insurance details in your annual statement, welcome pack, or by calling us on 1300 363 267.

Where can I find more information about the super laws?

We encourage you to visit these independent sites to help you better understand insurance inside super and the new laws:

You can also learn about:

How do I get in touch?

Call us with any questions about the super changes on 1300 363 267.

Or, email us at askamp@amp.com.au.

Insurance cancellation examples

Inactive

Erin takes a career break

A few years ago, Erin started her career as a business analyst and joined the company’s default superannuation plan, which included insurance.

After 8 years in the same job, and with a super balance of $38,000, Erin decided to take a career break and go back to uni. Because she was no longer earning money, her super contributions stopped. After 9 months she received an email from AMP saying that, under super laws, her insurance may be cancelled if her account continues not receiving a contribution or rollover for another 7 months. At the time, Erin was travelling, and forgot about it.

AMP wrote to her again 3 months later, which is when Erin called AMP to ask about her options. In the end, Erin decided she didn’t need all the insurance she had on her account, so she reduced it, which in turn reduced the cost of her insurance payments. Erin also filled out an online form agreeing that if her super account became inactive again she still wanted to keep her insurance. Erin then received an email confirmation that her insurance would remain on her account even if she didn’t make contributions for 16 months.

Cliff’s organised his insurance through a super account

Cliff decided to apply for life insurance, and his financial adviser recommended this was set up through an AMP super account. To cover the costs of this insurance, Cliff then arranged for a super contribution to be paid into the super account every April.

In January, Cliff received a notice to say his account hadn’t received a super contribution or rollover for 9 months and his insurance would be cancelled 7 months later, unless a contribution was received before then.

Cliff knew his annual contribution would be paid in time to stop the insurance from being cancelled. But to avoid receiving any more notices from AMP, he filled out the online form telling AMP he wanted to keep his insurance.

These examples are for illustrative purposes only and may not apply to your circumstances.

Low balance

Rohan, part-time worker and student

Rohan is 21. He works 20-hours a week at a department store while finishing his science degree. His AMP super account has a balance of $5,600 and includes $50,000 life insurance - which he pays for via his super account. Since Rohan started his job, he hasn’t given his super or insurance much thought.

On 25 November 2019, Rohan received an email from AMP saying his insurance may be cancelled under super laws, because his account balance was below $6,000. Rohan was busy and decided to deal with the email later. When Rohan received a reminder, he went to the insurance cancellations web page to find out more.

Rohan also entered his details in the AMP insurance needs calculator.

After considering the results, Rohan decided he was happy with his level of insurance and should keep it. He filled out the keep my insurance form and put a reminder in his diary to think about his insurance again in 12 months.

Emile decided to cancel her insurance early

Emile is in her early 20s and works and studies part-time. Emile rents with five other students and receives government study assistance. She has a $4,000 super balance plus Life and Total and Permanent Disability (TPD) insurance included with her super.

When Emile received a letter from AMP saying her insurance may be cancelled under super laws, she wanted to find out more. Emile did some online research into how much insurance she should have at her age and life stage, and spoke with some trusted friends. She then decided she was better off without any insurance for now.

Emile called the AMP call centre, and had her insurance cancelled earlier than the cancellation date, so she could stop paying any further premiums. Emile was glad to know she was saving her money for retirement.

Sylvia just landed her first job

Last year, Sylvia finished her HSC, and couldn’t wait to finally start earning money! She applied for loads of jobs and got one in November. Her new job came with a default super plan that included insurance for life, Total and Permanent Disability (TPD) and Temporary Salary Continuance (TSC). All the details about her super and insurance were included in the welcome pack she received, as well as details about how new super laws require insurance to be cancelled for people whose balance is below $6,000, unless they elect to keep it.

Since Sylvia’s account was only recently opened, she only had $350 from her first two super contributions in there, so she knew she could be affected by this law.

Sylvia received a reminder about the cancellation in February, and did some digging via the ASIC money smart website, and used their life insurance calculator. In the end, she decided to keep her life and TPD cover, but she didn’t want TSC at the moment.

Sylvia called AMP to cancel her TSC, and while she was on the phone, they talked her through how to keep her life and TPD cover (via the online form). It was done and dusted quickly and Sylvia was glad she was no longer paying for the portion of insurance she felt she didn’t need.

Michael just took out more insurance

Michael is 40, married with two young children. He has life insurance which he applied for five years ago and, at the time, went through underwriting to receive it. This insurance is held in a super account with a balance of $1000, and he regularly transfers money into the account to pay for his insurance premiums.

In November 2019, Michael and his wife met with a financial adviser for a financial health check and were advised to take out TPD insurance on top of Michael’s existing life insurance policy, to ensure he was covered in the event he became disabled.

After completing the underwriting process via his adviser, Michael’s policy was approved in mid-January. In the meantime, Michael’s adviser told him about the super laws cancelling insurance in low balance super accounts. Since Michael’s insurance is held in a super account, he is at risk of losing only his new TPD insurance.

AMP also called Michael to explain the situation and sent him an email detailing how to keep his TPD insurance. Michael filled out the paper application form and emailed it back to askamp@amp.com.au.

Leyla doubled her life insurance

Leyla is a single mother of her 17 year-old son, Felix. Last year, Leyla had $500k worth of life insurance held in a super account. She had applied for this insurance previously and went through an application process to receive it.

In late November 2019, Leyla bought a house! This reminded her to reassess how much insurance she should now have. Especially because she didn’t want Felix to have to worry about paying off the home, if she passed away.

Leyla used the AMP insurance needs calculator to better understand how much insurance she should take out, and decided she needed to increase her life insurance cover to $1m. Leyla completed an application and she was approved. AMP confirmed in January her insurance had increased to $1m, and what her new monthly insurance premiums would be.

While Leyla had a large amount of insurance, her super balance was just under $6,000. In February, Leyla received an email from AMP explaining that super laws will require them to cancel the additional $500k of insurance cover, unless she requests in writing to keep it or she increases her super balance to at least $6,000. (Under the super laws, the first $500k is not affected because her original application was made before November 2019).

AMP also called Leyla to explain the situation and sent her an email with all the details, including how to keep her insurance. Leyla replied ‘yes’ to the email stating that she wanted to keep her insurance.

These examples are for illustrative purposes only and may not apply to your circumstances.

We're here to help

Easy access to your super and insurance information via My AMP

In My AMP, you can view and manage your AMP super account, including your insurance, with ease. Register today using your AMP account number. You'll then be able to:

  • View your insurance details
  • see your super balance and how much is being contributed to your account
  • update your personal information, beneficiaries and provide your tax file number
  • compare, change and view your super investments

We're committed to the Insurance in Super Voluntary Code of Practice (the Code).

You can learn more, and access the full Code on ASFA's website.

Important information

All statements about insurance cover are general comments only and the specific terms and conditions of the relevant cover will need to be considered in the event of any claim.

Products in the Super Directions Fund and the Wealth Personal Superannuation and Pension Fund are issued by N.M. Superannuation Proprietary Limited (N.M. Super) ABN 31 008 428 322 (trustee), which is part of the AMP group (AMP). Before deciding what’s right for you, it’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions available from AMP at amp.com.au or by calling 131 267. Read AMP’s Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.

Products in the AMP Eligible Rollover Fund, National Mutual Retirement Fund, and NM Pro Super Fund are issued by Equity Trustees Superannuation Limited ABN 50 055 641 757 (trustee). Risk products are issued by AMP Life Limited ABN 84 079 300 379 (AMP Life), which is part of the Resolution Life group. AMP Life has proudly served customers in Australia since 1849. AMP Limited ABN 49 079 354 519 has sold AMP Life to the Resolution Life group whilst retaining a minority economic interest. AMP Limited has no day-to-day involvement in the management of AMP Life whose products and services are not affiliated with or guaranteed by AMP Limited. AMP Limited is not liable for products issued by AMP Life or any statements or representations made in the PDS for those products. “AMP”, “AMP Life” and any other AMP trademarks are used by AMP Life under licence from AMP Limited. Before deciding what’s right for you, it’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions available from AMP Life at amp.com.au or by calling 133 731. Read AMP Life’s Financial Services Guide for information about our services, including the fees and other benefits that AMP Life and/or other companies within the Resolution Life group may receive in relation to products and services provided to you.

Any advice and information provided is general in nature, hasn’t taken your circumstances into account, and is provided by AWM Services Pty Ltd ABN 15 139 353 496 (AWM Services), which is part of the AMP group (AMP). All information on this website is subject to change without notice.

Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability for any resulting loss or damage of the reader or any other person.