You can usually skip medicals when switching super funds. The Individual Transfer Option under the SMSF Master Insurance Plan brings your existing underwriting across, with cover limits of $2 million for Death and TPD and $20,000 per month for Income Protection.

The short answer

Yes, you can usually skip the medicals when switching super funds.

There are two main ways: continuation options with your original insurer, and the Individual Transfer Option under a new group policy. Both let your existing underwriting carry across to your new cover without redoing the health side of things. The catch is that both have conditions, and the most important one is that you need to be currently employed and physically capable of your normal job when you apply.

Why this is such a common worry

Life insurance underwriting is the process where insurers assess your health, lifestyle, occupation, and family medical history to decide whether to cover you and at what price. It’s how you end up with standard rates, loadings (extra premium for higher risk), exclusions (specific conditions not covered), or sometimes outright declines.

Here’s why people worry about it. If you’ve had cover for years and your health has changed in that time — maybe you’ve developed something, maybe a family member has been diagnosed with something hereditary — fresh underwriting could mean very different terms than you originally got. Loadings you didn’t have before. Exclusions on the new policy. Maybe a higher premium than you’ve been paying.

So the question “can I avoid medical underwriting?” is really “can I avoid putting my existing cover at risk?” When you’re moving cover into an SMSF through SMSF Insurance, the answer is generally yes — through the Individual Transfer Option built into the SMSF Master Insurance Plan.

The Individual Transfer Option — primary way to skip underwriting

Under the Individual Transfer Option, AIA Australia (the insurer behind the SMSF Master Insurance Plan) accepts your existing underwriting and issues new cover on substantially the same terms. No new medicals. No new health questions about pre-existing conditions. Your underwriting position from the old cover is preserved on the new policy.

The transfer limits are:

Within these limits, no fresh underwriting is required. The application is more of a confirmation that your existing cover details are accurate and that you meet the eligibility conditions.

Continuation options — the secondary path

If the Individual Transfer Option isn’t available — for example, if you don’t have an SMSF destination or you’ve already lapsed past the application window — continuation options let you convert your existing group cover to a retail policy with the same insurer, again without medicals. Cover level preserved, underwriting preserved, but the policy shifts from group to retail (which usually means higher premiums).

Continuation options come with strict time windows, typically 30 to 90 days from leaving your old fund. Miss the window and you’re back to standard underwriting if you want new cover.

The eligibility test — where some applications fall over

To use the Individual Transfer Option, you’ll need to meet specific conditions at the time you apply. This is where some applications come unstuck if people don’t realise the requirements.

The conditions:

  • Aged under 60
  • Gainfully employed and physically capable of working at least 30 hours per week
  • Existing cover accepted on terms no worse than +100% extra mortality and no more than two exclusions
  • Not currently entitled to claim, or receiving, a TPD or income protection benefit
  • Not terminally ill with a life expectancy of less than 12 months
  • Can provide a recent statement of your existing cover (dated within the last 30 days)

If you’re not currently working in your normal role at full capacity, including being on workers’ comp, extended sick leave, or unable to work due to illness, the transfer option usually isn’t available. New cover would then need full underwriting, and depending on why you’re off work, that could mean exclusions for the very thing you’d want covered.

If you’re over the takeover limit

Holding more than the transfer limits doesn’t mean you’re stuck. The portion within the limit transfers under the option with no medicals; the excess gets standard underwriting. So a $2.5 million death cover holder transfers $2 million under the option and the extra $500,000 is assessed normally — without the transfer portion being affected by the outcome on the rest.

Adding new cover types — what to know

The Individual Transfer Option applies to cover types you already have. If you’ve got death cover but no TPD, and you want to add TPD when you move to your SMSF, the new TPD cover needs standard underwriting. It’s not a transfer — there’s nothing to transfer.

This is worth thinking about with timing. The optimal time to apply for any new cover is when you’re young, healthy, and at work. If you’re moving into an SMSF and thinking about adding cover types you don’t currently have, do it now rather than later. Adding new types later would mean underwriting at your then-current age and health.

Putting it all together

If you want to minimise underwriting risk when switching super funds:

  • Apply for SMSF cover while you’re working, in good health, and under 60
  • Use the Individual Transfer Option for everything you currently have
  • Add any new cover types at the same time, while you’re going through the application anyway
  • Get the new cover in force before initiating the rollover from your old fund

Document what you currently hold (with a statement dated in the last 30 days) so the transfer application is clean

Skip the medicals — use the Individual Transfer Option

Through SMSF Insurance, the Individual Transfer Option under the SMSF Master Insurance Plan lets you bring your existing cover across without medicals. Get a quote and see what your current cover looks like under the Plan.

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