Is your insurance
pandemic proof?

The shock of this pandemic will be the shake-up many need to review their insurance. Is it the right insurance? Do you really have enough?

If there’s ever been a time to prove how the unexpected can turn your life upside down, it has been 2020. It has rammed home the importance of having insurance that covers you against events beyond your control. 

You’re covered

The good news is that if you have Death and Total and Permanent Disablement (TPD) cover through EISS Super, your insurance will cover you if you become unwell due to Covid-19 after your insurance commenced. If you need to make a claim related to Covid-19, like any other claim, you will be assessed and need to meet the eligibility requirements.

If you have salary continuance cover through EISS Super, we will also cover you if you become unwell due to Covid-19 and are unable to work for longer than your specified waiting period (30, 60 or 90 days). But it doesn’t cover you if you’ve been stood down or become unemployed.

What happens to my insurance if...

...I make an application to access my super early? If you withdraw all your super from your EISS Super account your account will be closed and your insurance cover will be cancelled.

If after your withdrawal your account balance is less than $6,000 your insurance cover and your conditions of cover will remain unchanged. Your premiums will continue to be deducted from your account. If however your account has been inactive (i.e. has not received a contribution or rollover) for 16 months or more the insurance you have may be cancelled. Accessing your super early could also affect how much you'll have in your super at retirement. You can find more information about the 'Steps to take before withdrawing your super early' on the Australian Government's MoneySmart website or check out our guide about 'What you need to consider before accessing your super early.'

...I lose my job or my work hours are reduced? Your cover will remain in place however if you become disabled while you are unemployed or working less than 15 hours per week the assessment of your claim will be made under the Everyday Working Activities Test. 

...I test positive to Covid-19 prior to joining the fund? Limited cover conditions will apply if you attempt to make a claim. Please refer to the 'Limitations and exclusions' section of our 'Insurance in your super' document for further information.  

Reflect and review

If you’ve taken a close look at your finances, you’ll know how much you need to cover your expenses like your mortgage, groceries, bills and so on and of course you’ll already know how much you earn.

But do you know what would happen if you were unable to work due to illness?

Our insurance calculator is a quick and easy way to see how much cover you may need.

You should also review the features of your insurance. What are the main inclusions (and exclusions), waiting periods and excess levels which suit you best? Your insurance should focus on helping you recover from an accident or illness, not saving you a few dollars.

Your super insurance

Some other numbers you’ll need to check are how much insurance cover you already have through your super, as you might need to adjust them depending on where your life is at:

  • If you’re young and don’t have a family, then you might not need life insurance.
  • If you have a mortgage, a family and you’re the main income earner, then you could consider insurance cover to ensure your family will be looked after in case the unpredictable happens.
  • If you’re near retirement, have paid off your mortgage and your children have left home, you could look at reducing your cover.

Adjusting and paying

You can adjust the amount of insurance you have through your super.

If you want to increase your cover, you’ll need to apply and may have to undergo a medical check. This is the same process as applying for any new insurance. The main difference – apart from the amount of cover on offer and the cost – is how you pay the premiums.

Insurance through your super allows you to pay your premiums from your superannuation guarantee (SG) contributions. The benefits of this is that it is:

  • Tax-effective as it’s paid from your pre-tax income.
  • Convenient as your premiums are deducted from your super contributions.
  • Economical as it minimises the impact on your take-home pay.

There are some disadvantages to insuring this way:

  • If you claim on your TPD insurance and you’re under age 60, there may be some tax payable on the benefit.
  • Your insurance ends when you retire.

Avoid double-ups

Many people have more than one super fund due to changing employers. You might find you’re paying two sets of premiums, which doesn’t automatically give you or your beneficiaries two payouts. It pays to consider merging your super funds and only pay one set of fees.

It’s during times like these many of us are able to go over some paperwork, review our finances and look at costs and where we can save money. Insurance is one area where you can be smarter and consider varying your cover. Use the time wisely.