It’s always a good idea to know where you stand with your insurance and super - especially if you’re experiencing the economic impacts of COVID-19, thinking about accessing your super early, or your job or income has changed recently.
Here, you can learn more about how your insurance may be affected, including ways to stay on top of it and get the protection you need.
We’ve listed below some of the ways your insurance may be affected by COVID-19, and where to find more information.
There are no pandemic exclusions in place for insurance offered through AMP as a result of COVID-19. This means, you’re eligible to make a claim so long as the usual terms and conditions that apply to your insurance are met, for example, your premiums continue to be paid.
Accessing super early
If you have insurance inside your super account, accessing your super early could affect it in a couple of different ways.
Firstly, if you withdraw a lump sum from your super and it leads to a zero account balance your super account may be closed, and your insurance will be cancelled from the closure date. Your insurance may also eventually be cancelled if your account balance remains too low to pay the monthly premiums.
Secondly, if you’re not able to make any contributions into your super account for 16 months, your insurance may be cancelled because the account is considered inactive under super laws, unless you tell your super provider you want to keep it.
Will my income protection cover me if I’ve lost work?
Income protection covers you if you can’t work because of illness or injury. Income protection doesn’t cover loss of work for other reasons (like business closure).
If you have income protection with your super, it’s important to understand how it may be affected by a change to your work hours or income, so it’s a good idea to check your policy. What’s more your income protection cover will stop if you’re no longer employed.
For more information on your policy and cover, please contact your financial adviser or our customer support team on 131 267.
Will my insurance be affected if my work hours have changed?
Generally, insurance inside super is assessed using the hours you were working and your income at the time of injury or illness. However, since many people’s hours have been reduced as a result of COVID-19, some insurers have brought in some short-term measures to help.
For example, with certain AMP Life insurance policies held inside an AMP super account – claims made where the injury or illness occurred between 29 February 2020 and 31 March 2021 will be assessed in a way that makes sure the benefits aren’t reduced because of a reduction in work hours. Learn more
Each insurance type and policy has its own terms and conditions, so you’ll need to check yours to understand more, or call your super provider.
What if I’ve been made redundant?
If you have an employer superannuation account, then, when you leave the employer the insurance held in this account may be affected. For example, if you received insurance automatically when you joined your employer (as part of the plan), once you leave your job, this insurance may no longer be passed on to you, or the cost of it may be higher. Please check your insurance policy or call us for more information specific to your plan.
There may also be eligibility requirements to be aware of once your circumstances change including age, account balance and contributions - if you’re not in a position to make any contributions into your super account for 16 months, your insurance may be cancelled under super law.
Do I have enough cover?
It’s important to review your cover regularly to make sure it’s still right for you, especially if your circumstances have changed since you took out the insurance. It may be worth considering some adjustments to help reduce the cost of your insurance, including:
- reducing the sum you’re insured for
- removing benefits or additional cost options
- increasing the waiting period or reducing the benefit period (income protection)
- removing indexation or declining an annual indexation increase (will occur at the next policy anniversary) – indexation is where your insurance policy increases to keep up with inflation.
Options can vary so please refer to your insurance terms and conditions for more information about these benefits or speak to a financial adviser. If you’re experiencing financial hardship and you’re worried about losing your insurance, please contact us to talk through your options on 131 267.
To understand the type of insurance you may need and how much, you can use our handy calculator below. You can also get an idea of your life insurance needs using the government’s MoneySmart calculator.
Could accessing your super early put your insurance cover at risk?27 May 2020 | COVID-19 There are many things you should consider before making the decision to access your super early, one of them is insurance cover inside your super. Read more
Early access to super – things to consider16 April 2020 | COVID-19 Super is designed to pay for your life in retirement, so withdrawing money from it now could have an impact on your retirement lifestyle. Find out more with AMP Read more
What to do next if you’re facing redundancy04 September 2020 | COVID-19 Redundancy is made harder by the uncertainty of COVID-19. Here are things you can do to prepare yourself for the future. Read more
What to do next
Things are changing all the time, and we’re working with insurers to help you get the support you need. We’ll keep this page updated with the latest information.
Insurance inside super support
This information is for insurance inside super provided through an employer plan or retail super.
Some insurers are providing extra relief because of the impact of COVID-19. For example:
- AMP Life are supporting super members whose work hours have been reduced due to COVID-19. They’re assessing claims made where an injury or illness occurred between 29 February 2020 and 31 March 2021 in a way that makes sure benefits aren’t reduced because of a reduction in work hours. Find out more
- Some AMP super plans are offering an insurance premium and cover pause. Find out more
Call us on 131 267 to understand your cover and how we can help you.
Or find out more here:
Example: Insurance support for an AMP client
This made up example represents a possible, real-life scenario. Everyone’s circumstances are different, and claims are assessed on a case-by-case basis. Please consider your circumstances and speak to a financial adviser to understand your options.
Sabrina’s income protection through COVID-19
Sabrina is a 35-year-old occupational therapist who was earning $80,000 per year until COVID-19 struck. Her hours were cut from 40 to 15 hours per week, and her income dropped to $30,000 per year. If that wasn’t enough, during this time Sabrina fell and hurt her back. She was unable to get out of bed and her doctor advised her she couldn’t work due to her injury. Sabrina contacted AMP to make a claim against her income protection insurance provided by AMP Life.
How AMP Life supported Sabrina
Usually, Sabrina’s income protection payment would be worked out as a percentage of her income at the time of her injury. But, fortunately for Sabrina, AMP Life recognise the special circumstances that COVID-19 has caused to employment conditions and have built some extra short-term support for claims like this one.
So, once AMP Life had completed Sabrina’s assessment claim to ensure the terms and conditions were met, it was approved. AMP Life then looked at which was higher - her income and/or work hours as at the date she hurt her back ($30,000), versus her income and hours as at 29 February 2020 (before COVID-19). Since she was earning more ($80,000) on 29 February 2020, they used the higher value to work out how much to pay her in insurance benefits.
In this case, Sabrina was entitled to receive up to 75% of her pre-COVID $80,000 salary once she completed her waiting period (different policies have different waiting periods). And, Sabrina is now receiving $5,000 per month instead of $1,875 per month.
Please note: JobKeeper payments are offset by income protection payments. So, for example, if Sabrina was also receiving $3,000 per month for JobKeeper through her employer, this would be deducted from the $5,000 claim payment, and her monthly insurance benefits would be $2,000 per month instead.
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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.