People rarely take this approach with their finances. Often, financial matters are treated like an overstuffed, messy closet that needs to be dealt with but remains closed and put off for another time
Life Insurance Premium Options
Regular payments for your insurance are referred to as premiums and they will vary depending upon the amount insured and your age. Which premium is better for you?
Get insurance application right or blow your cover
When you apply for personal risk insurance, the insurer seeks answers to questions about your health, occupation and insurance needs.
This is so that the insurer can assess the likelihood of you making a claim and to assess the premium cost. You must answer all questions completely and honestly.
Is your Australian Personal Insurance Paid out of your Super?
Currently there is over $17 billion dollars in unclaimed superannuation, which is not an insignificant sum of money and we anticipate that a large proportion of these funds are for Kiwis. The cordial relationship we have with our closest neighbors, (outside of the rugby pitch!) means that we enjoy the opportunity to live in each other’s back yard. With golden beaches and a warmer climate there are estimated to be over 500,000 Kiwis living in Australia, and a larger number who have lived and worked there, before heading back to the land of the long white cloud.
Whilst NZ was a little slow off the mark with setting up KiwiSaver in 2007, Australia was ahead of the curve. Australia enforced compulsory superannuation in 1992, building on the superannuation system they had in place for union members, whereas KiwiSaver is still not compulsory.
One of the interesting side effects of superannuation in Australia is the tie with personal insurance, such as life and income protection. Approximately 87% of all insurance policies in Australia are written on the back of compulsory superannuation with insurance premiums paid directly from the member’s super fund. In NZ, the KiwiSaver act governing KiwiSaver schemes prevent this occurring.
For the returning Kiwis that we meet, who have Australian superannuation, they are aware of the insurance cover they have in place in Australia. Unfortunately, they could be paying for something that does not exist. Most of the insurance policies that we’ve read through have clauses that mean once you have left Australia, are no longer a resident of Australia, or have not been a resident for two years, then you are no longer eligible for the insurance cover.
Even though you are no longer covered doesn’t mean you stop paying for the cover. If you didn’t know the policy rules and haven’t opted out of your insurance, the premiums will continue to be taken out of your super fund. We can’t let this underarm incident to continue.
If you are no longer in Australia and not contributing to your superannuation funds, these insurance premiums will reduce the return on your funds until you either cancel them or bring your funds back to New Zealand. Ultimately, this could lead to those funds whittling away to nothing, while our Australian cousins take funds off you for something that doesn’t really exist, laughing all the way to the bank. This, along with the other benefits of reduced costs and greater control of your retirement funds mean 'why wait'? You should be looking to transfer your Australian super back to New Zealand today.
Get in touch with your KiwiSaver adviser to get the process underway and if in doubt, call the Australian Super specialists at Stewart Group for a no obligation discussion on your situation.
