Insurance through your superannuation: take the time to understand your cover
10 April 2018
While insurance may not be the most popular topic to discuss around the BBQ, it’s important to take the ‘gamble’ out of the things that really matter – like protecting your family in the event that you get sick or injured and are unable to work, pay the mortgage or your rent.
Did you know that most superannuation funds offer their members life insurance options within their superannuation fund? It’s worth understanding how this works when you’re making decisions about structuring your life insurance cover. The amount of cover you may be entitled to receive will depend upon various factors, including your age and the superannuation fund that you’re a member of.
Check what you’re covered for
If you’re reviewing your life insurance policy, a good place to start is to check what cover you may be entitled to receive through your superannuation fund, so that you can compare it against other insurance coverage options.
There are three types of insurance cover generally held within a superannuation fund, such as:
Typically life insurance (confusingly, sometimes this is also called death insurance) is paid to beneficiaries upon the death of the insured fund member. Generally, life insurance cover is available as long as it commences before the fund member turns 70.
Find out more about Suncorp’s Life Protect Insurance.
Total and Permanent Disability (TPD)
A TPD benefit is usually paid if a fund member suffers an illness or injury that makes them permanently unable to return to their usual occupation. Generally, this cover is available as long as it commences before the fund member turns 65.
Find out more about Suncorp’s Total and Permanent Disability Insurance.
Income Protection (IP)
An IP benefit is usually paid if the fund member suffers an accident or illness that results in the member being unable to work.
Find out more about Suncorp’s Income Protection Insurance.
Benefits of life insurance through superannuation
Though not an exhaustive list, these are some of the potential benefits of having life insurance through superannuation.
It may be cost-effective because the fund is able to buy life insurance in bulk, meaning that fund members benefit from the economies of scale that this approach delivers.
Offers some level of cover
Fund members may be at least partly covered if they experience an accident or illness and are unable to work even if they do not have any other type of insurance outside of superannuation.
Premiums are automatically deducted
Generally, premiums are automatically deducted from your superannuation fund, which means you may not need to include life insurance premiums within your budget. Depending on your individual circumstances, the premiums are usually taken out of pre-tax contributions, which may mean that you pay a lower amount of tax in the long term. 1
Why you should regularly review your life insurance needs
Your personal circumstances tend to change as you move through different stages of your life and so it might be a good idea to regularly review your life insurance needs to ensure you have the right level of cover. For example, you might have different life insurance needs after you get married or divorced, have children, buy a new home or change jobs.
You can usually increase or decrease the level of your life insurance cover or even cancel your life insurance cover if you no longer need it. The important thing is to make sure the level of life insurance cover you have is right for you. Learn more about what life insurance benefits Suncorp Super offers, or check out our life insurance products outside of super.
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Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product. For Suncorp Everyday Super you should read and consider the Suncorp Everyday Super PDS and Product Guide. For Suncorp Brighter Super, please read and consider the Suncorp Brighter Super Personal Super and Pension PDS or for Suncorp Brighter Super Business Super please read and consider the Suncorp Brighter Super Business Super PDS. Everyday Super, and Brighter Super are part of the Suncorp Master Trust (Fund) (ABN 98 350 952 022, RSE Fund Registration No. R1056655). Suncorp Portfolio Services Limited (Trustee), ABN 61 063 427 958, AFSL 237905, RSE Licence No L0002059 is a related body corporate of Suncorp Group Limited ABN 66 145 290 124. The products referred to are not bank deposits or other liabilities of Suncorp Bank (Suncorp-Metway Limited ABN 66 010 831 722) (SML) and are subject to investment risk including possible delays in repayment and loss of the interest and principal invested. SML is not liable or responsible for, and does not guarantee or otherwise support, Suncorp Everyday Super accounts. SuperRatings Pty Ltd (ABN 95 100 192 283, AFSL 311800)(SuperRatings) does not issue, sell, guarantee or underwrite Suncorp Everyday Super. Go to www.superratings.com.au for details of its ratings criteria.
Before moving your superannuation you should consider: any fees payable (e.g. for exit or withdrawal); where future employer contributions will be paid; whether current insurance entitlements will be retained or equivalent cover made available; and any other possible impact, e.g. to your investments or tax position.