Thousands of Australians could be about to lose the only insurance they have and not realise it.

Key points: From July 1 there will be major changes to superannuation aimed at cutting fees

From July 1 there will be major changes to superannuation aimed at cutting fees Financial counsellors are concerned the changes will strip Australians living in remote areas of insurance they don't know they have

Financial counsellors are concerned the changes will strip Australians living in remote areas of insurance they don't know they have People on extended maternity leave or sick leave could also lose their insurance with the changes

Starting from July 1 there are major changes to superannuation, which were designed to stop super balances being eaten up by insurance fees.

Among the changes, so-called "ghost accounts" will be transferred to the Australian Taxation Office if they haven't had any contributions for 16 months, or have a balance of less than $6,000.

Financial counsellors believe that means people who don't have a bigger account will no longer be covered by insurance policies attached to the funds, including life and total and permanent disability (TPD) cover.

They were shocked to realise the changes could leave vulnerable people without vital insurance they've spent decades paying for.

The changes are also expected to adversely impact people on extended sick or maternity leave and young workers unless they get in touch with their super fund.

Thousands of Indigenous Australians could miss out

Broome financial counsellor Alan Gray said he had been "losing sleep" about the changes since he found out how they would impact on his clients.

Superannuation companies are contacting account holders to notify them of the upcoming changes.

"We're talking about amounts of money that could be more than $100,000, in some cases more than $200,000 or even $300,000 in insurance payouts to some of the poorest people in Australia," he said.

"What really is making me lose sleep at the moment is that no-one in the cities who framed these laws realised that there are thousands upon thousands of Indigenous Australians who never got street delivery of mail," Mr Gray said.

"What will happen if they don't hear about these changes, then they will lose all of those benefits on July 1 and the insurance companies will no longer have to pay out any of those large amounts of money."

TPD and death benefits attached to super funds are hugely important, particularly for Indigenous communities, where life expectancy is lower and rates of illness are higher than the general population.

In a recent survey of Indigenous people, 37.6 per cent of participants said they had no insurance at all.

The survey concluded "many Indigenous people may have group insurance through their superannuation but are unaware of it".

First Nations Foundation CEO Amanda Young said policy makers had failed to think through all the possible impacts of the changes.

"In trying to protect people with low balances they forgot about impact on people who need extra special protection like Indigenous Australians, or indeed young people aged under 25," she told the ABC.

"If you lose insurance cover, if your funds are transferred to the Australian Tax office, then you are generally left with no protection at all, and for Aboriginal and Torres Strait Islander people that can be the only insurance they have."

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Leah Dolby sought help from financial counsellor Alan Gray to contact her super accounts. ( ABC News: Amy Bainbridge )

'I didn't like the sound of the letter'

Broome resident Leah Dolby has not been able to work since 2017 when she suffered health complications, including renal failure.

She had five super accounts over the course of her working life, and four with active insurance policies even though she hasn't been able to make any recent contributions.

Ms Dolby recently qualified to receive a disability support pension, and planned to make a claim for TPD on her superannuation insurance policies.

She only just received a letter notifying her of the change, and has a small window to contact her fund to keep her insurance active.

"I didn't like the sound of the letter when I read it, and I think nah, this can't happen, I can't work and all this, I'm going to lose out on my super, so I need to do something about it," she told the ABC.

"It just made me feel a bit upset, for me to work that hard, and all this super I'm going to lose out on it.

"So I thought I'm going to need to get some help to see what I can do about it."

Ms Dolby met up with Mr Gray, who wrote to her four superannuation funds to notify them of her intention to make a claim before the looming deadline.

She has urged others to do the same.

"I've been encouraging some people, but I think there's a big need out there for our people to get this help and have this discussion about their super," she said.

"Because in the end we might lose out, we might not, we might be lucky. But it'd be good to have that discussion and remind families about superannuation."

Mr Gray said super funds should give a public undertaking to retrospectively honour any accounts where someone can prove they were intending to claim insurance, but did not do so by July 1.

Nick Kirwan from the Financial Services Council, which represents insurers, said the industry was "working hard" to get the message out about the changes.

"We're especially worried about some of those people, because their accounts are quite likely to be inactive, they may not get that communication," he said.

"If people are on parental leave, it might be the last thing they want to have their life insurance cancelled if they've got a new baby to think about, or people who are on long-term sick leave.

"Insurance companies want insurance customers, so they absolutely don't want people to have their insurance cancelled, if the person needs the insurance."

Financial counsellor Alan Gray is concerned super changes will strip vulnerable people of their insurance. ( ABC News: Amy Bainbridge )

Legal action possible

There has been some discussion that superannuation funds could face a legal challenge if members were unaware they were losing their insurance cover.

A report this week from an industry lunch identified it as a "sleeper issue".

Amanda Young from First Nations Foundation said superannuation trustees had a duty to act in the best interests of account holders.

"If ... I discover that I'm not covered by insurance because something happened on July 1, 2019 that I didn't know about, then I'm going to be looking for someone to go and sue," she said.

Dr Martin Fahy from the Association of Superannuation Funds of Australia (ASFA) said any talk of legal issues was "secondary" to the industry's immediate priority of contacting members.

"That's a secondary issue. Over the coming weeks the big focus for us is less on the legal risks the funds have," he said.

"The funds' primary concern here is to do the right thing for their members and get their members engaged and make sure they're opening that post, opening the email, taking the phone call."

Mr Kirwan would not be drawn on the prospect of potential legal action, saying nobody knew how much the industry could save in terms of insurance payouts.

"The reality is of course it will also cost the industry a lot of money in lost premiums too," he said.

What should I do?

Find your super:

You can track it down yourself, or try the easier route and sign onto your MyGov account to find your "lost" super.

Ask about your super:

You can go online to find out how much money your super is earning. You can also find out about fees and administrative charges and automatic default payments for things like insurance.

You can also check what insurance cover you've got and make changes.

Consolidate your funds:

Under the new changes, some funds will be automatically consolidated by the ATO, but if you have active funds with more than $6,000 you can consolidate them yourself.

You can nominate a fund through a form from the ATO website. You also need a MyGov account for this to work.

Industry launches advertising campaign

The Financial Services Council has teamed up with the ASFA to launch a marketing campaign to make people aware of the changes.

"Get in touch with your super fund, ask them what you've got and then make a decision about whether you want to keep it," Mr Kirwan said.

Mr Kirwan said he did not have particular concerns for people in remote and rural areas getting the message because everyone was in the same boat.

"I think everybody is in a situation where they may not get the notification, which is why we're working hard to get the message out.

"If people have moved home for example and not told their super fund about it, then they're probably not going to get the letter."

For more information on the upcoming changes, visit Time to Check.