(PRWEB) July 20, 2007 -- Jossel Ginsburg of Ginsburg Financial Services in Sydney Australia, issued a statement today urging members of Australian stand-alone life and disability cover in super to avoid losing their risk insurance benefits by immediately submitting their Tax File Numbers to their fund managers.
The Tax File Number lodgment regulation is about to create a huge financial crisis and shortfall to those who are most vulnerable, says Ginsburg. The deadline date for action is 1st July 2007 plus the days of grace for premium payments.
Those who fail to submit their details to their superannuation funds may lose their Life, Total and Permanent Disability Benefits and even their Salary Continuance and Income Protection Benefits associated with their superannuation plans and, they may never be able to get the cover again.
Those superannuation fund members who are traveling and not in contact with their superannuation life and parallel benefit providers, are most likely completely unaware of this requirement.
It seems that those who drafted these requirements do not know that thousands of millions of protection cover is written as standalone term life and disability cover under umbrella superannuation arrangements set up by almost every competent life assurer in Australia.
Following is a message received from a major Australian insurer:
"Effective 1 July 2007, if we do not have a TFN on record:
1. The Trustee will be required to pay an extra 31.5% tax on all employer contributions made to the risk superannuation policy that exceed $1,000 in that financial year (including the first $1,000), and
2. Will not be able to accept any member contributions. These include all personal contributions and any contribution that is made on behalf of the member (other than the employer).
The implications of the above on a client's valuable insurance cover are twofold:
1. The extra 31.5% tax will be deducted from the employer contributions and, if there are insufficient funds for the Trustee to pay the no-TFN tax and the insurance premium, the policy will lapse.
2. As we cannot accept member contributions, the insurance premiums cannot continue to be paid and the member's policy will lapse.
Should your client miss the 1 July 2007 deadline, there is a 29-day grace period where the policy can continue upon receipt of the TFN. There is a further 21-day window of opportunity for the policy to continue, with the completion of a reinstatement document."
Ginsburg warns that every insurer has its own due date for premium payments and days of grace.
So, what will happen if you do not submit your tax file number before the end of this month (if you are paying your premium monthly or the annual premium is due now)?
1. Those who die or get disabled will leave themselves and their beneficiaries in precarious positions or even destitute.
2. Those who are ill and no longer insurable will never be able to re-instate the cover that they so desperately need for themselves and their loved ones.
3. The insurers will save a fortune as they will be rid of the potential claims and all of those too sick to deal with this issue.
This is an attempt to warn and assist those who are in danger of losing their cover. Please do overwhelm my site by contacting me. Contact your superfund providers and life assurers directly.
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