Central Victorians who have been unable to contribute to their superannuation for an extended time could lose their life insurance under reforms coming into play next month.
From next Monday, super funds will have to cancel insurance cover attached to accounts into which no contribution has been made for 16 months.
"Many people who have been unable to work or who have multiple super funds may be affected by these changes," Bendigo lawyer Nicole Connors said.
The federal reform package intends to ensure people's super funds are not eaten away by unnecessary fees and premiums. But there are concerns people might not become aware of the changes until they try to make a claim on insurance.
Ms Connors said people who had changed address or held multiple funds might not get their letter from their super fund before their insurance was cancelled.
This meant they faced losing income, total and permanent disability or death insurance, she said, and would not be covered from that date.
Ms Connors said the benefit of total and permanent disability insurance in particular was that if someone suffered an illness or accident not related to their work, a motor vehicle crash or having occurred in a public place, they would still be able to access payments.
These policies with super funds often did not require medical exams, she said.
Ms Connors said applying for such insurance elsewhere might mean people would have to disclose pre-existing conditions for which they might not be covered.
The Financial Services Council and Association of Superannuation Funds of Australia have also voiced concern about people's awareness of the changes.
Head of the FSC Sally Loane said many people only held life insurance through their super.
"This legislation has been introduced for very good reasons, however the timeframe for implementation has meant it's been challenging for superannuation funds to engage their members with the impact of the changes in just a few short months," ASFA chief executive officer Martin Fahy also said.
A recent survey of more than 1000 people found almost 40 per cent had a super account that had not received a contribution in the past 16 months.
It also found only one in four people always opened letters their super fund sent them.
People are advised to contact their superannuation fund or seek legal advice if concerned about the impact of the reforms on their insurance cover.
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