{"id":7915,"date":"2023-03-27T12:04:42","date_gmt":"2023-03-27T01:34:42","guid":{"rendered":"https:\/\/adelaideprivatewealth.com.au\/a-financial-safety-net-through-super\/"},"modified":"2023-03-27T12:04:42","modified_gmt":"2023-03-27T01:34:42","slug":"a-financial-safety-net-through-super","status":"publish","type":"post","link":"https:\/\/adelaideprivatewealth.com.au\/a-financial-safety-net-through-super\/","title":{"rendered":"A financial safety net through super"},"content":{"rendered":"<div>\n<p><strong>Most super funds offer life, total and permanent disability (TPD) and income protection insurance for their members.\u00a0<\/strong><\/p>\n<p>When reviewing your insurance, check if you\u2019re covered through your super fund. Compare it with what\u2019s available outside super to find the right policy for you.<\/p>\n<p><img decoding=\"async\" loading=\"lazy\" alt=\"\" height=\"300\" src=\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/wp-content\/uploads\/2023\/03\/A_financial_safety_net_through_super.png\" width=\"570\"><\/p>\n<h3>Types of life insurance in super<\/h3>\n<p>Super funds typically offer three types of life insurance for their members:<\/p>\n<ul>\n<li>\n<p><a href=\"https:\/\/moneysmart.gov.au\/how-life-insurance-works\/life-cover\" target=\"_blank\" rel=\"noopener\">life cover<\/a>\u00a0\u2014 also called death cover. This pays a lump sum or income stream to your beneficiaries when you die\u00a0or if you have a terminal illness.<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/moneysmart.gov.au\/how-life-insurance-works\/total-and-permanent-disability-tpd-insurance\" target=\"_blank\" rel=\"noopener\">TPD insurance<\/a>\u00a0\u2014 pays you a benefit if you become seriously disabled and are unlikely to work again.<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/moneysmart.gov.au\/how-life-insurance-works\/income-protection-insurance\" target=\"_blank\" rel=\"noopener\">income protection insurance<\/a>\u00a0\u2014 also called salary continuance cover. This pays you a regular income for a specified period (this could be for 2 years, 5 years or up to a certain age) if you can\u2019t work due to temporary disability or illness.<\/p>\n<\/li>\n<\/ul>\n<p>Most super funds will automatically provide you with life cover and TPD insurance. Some will also automatically provide income protection insurance. This insurance is for a specified amount and is generally available without medical checks.\u00a0<\/p>\n<p>TPD insurance cover in super usually ends at age 65. Life cover usually ends at age 70. Outside of super, cover generally continues as long as you pay the premiums.<\/p>\n<h3>Insurance on inactive super accounts<\/h3>\n<p>Under the law, super funds will cancel insurance on inactive super accounts that haven\u2019t received contributions for at least 16 months. In addition, super funds may have their own rules that require the cancellation of insurance on super accounts where balances are too low.<\/p>\n<p>Your super fund will contact you if your insurance is about to end.<\/p>\n<p>If you want to keep your insurance, you\u2019ll need to tell your super fund or contribute to that super account.<\/p>\n<p>You may want to keep your insurance if you:<\/p>\n<ul>\n<li>\n<p>don\u2019t have insurance through another super fund or insurer<\/p>\n<\/li>\n<li>\n<p>have a particular need for it, for example, you have children or dependents, or work in a high-risk job<\/p>\n<\/li>\n<\/ul>\n<h3>Insurance for people under 25 or with low super balances<\/h3>\n<p>Insurance will not be provided if you\u2019re a new super fund member aged under 25, or your account balance is under $6000 unless you:<\/p>\n<ul>\n<li>\n<p>contact your fund to request insurance through your super<\/p>\n<\/li>\n<li>\n<p>work in a dangerous job and your fund chooses to give you automatic cover \u2013 you can cancel this cover if you don\u2019t want it.<\/p>\n<\/li>\n<\/ul>\n<p>If you already have insurance and your balance falls below $6000, you usually won\u2019t lose your insurance as a result.<\/p>\n<div class=\"calculatorLink clickable\">\n<p><a href=\"https:\/\/moneysmart.gov.au\/how-life-insurance-works\/life-insurance-calculator\" target=\"_blank\" rel=\"noopener\">Use this Life insurance calculator<\/a><\/p>\n<p>Work out if you need life insurance through your super and how much cover you might need.<\/p>\n<\/div>\n<p>Superannuation and insurance can be complex. If you need help call your super fund or speak to a financial adviser.<\/p>\n<h3>Pros and cons of life insurance through super<\/h3>\n<p><strong>Pros<\/strong><\/p>\n<ul>\n<li>\n<p><strong>Cheaper premiums\u00a0<\/strong>\u2014 Premiums are often cheaper as the super fund buys insurance policies in bulk.<\/p>\n<\/li>\n<li>\n<p><strong>Easy to pay<\/strong>\u00a0\u2014 insurance premiums are automatically deducted from your super balance.<\/p>\n<\/li>\n<li>\n<p><strong>Fewer health checks<\/strong>\u00a0\u2014 Most super funds will accept you for a default level of cover without health checks. This can be useful if you work in a high-risk job or have health conditions that can make it difficult to get insurance outside super. Check the\u00a0 product discloure statement (PDS) to see the exclusions and treatment of pre-existing conditions.<\/p>\n<\/li>\n<li>\n<p><strong>Increased cover\u00a0<\/strong>\u2014 You can usually increase the amount of cover you have above the default level. But you\u2019ll generally have to answer questions about your medical history and do a medical check.<\/p>\n<\/li>\n<li>\n<p><strong>Tax-effective payments<\/strong>\u00a0\u2014 Your employer\u2019s super contributions and salary sacrifice contributions are taxed at 15%. This is lower than the marginal tax rate for most people. This can make paying for insurance through super tax-effective.<\/p>\n<\/li>\n<\/ul>\n<p><strong>Cons<\/strong><\/p>\n<ul>\n<li>\n<p><strong>Limited<\/strong>\u00a0<strong>cover<\/strong>\u00a0\u2014 The amount of cover you can get in super is often lower than the cover you can get outside super. Default insurance through super isn\u2019t specific to your circumstance and some eligibility requirements may apply.<\/p>\n<\/li>\n<li>\n<p><strong>Cover can end\u00a0<\/strong>\u2014 If you change super funds, your contributions stop or your super account becomes inactive, your cover may end. You could end up with no insurance.<\/p>\n<\/li>\n<li>\n<p><strong>Reduces your super balance<\/strong>\u00a0\u2014 Insurance premiums are deducted from your super balance. This reduces your savings for retirement.<\/p>\n<\/li>\n<\/ul>\n<p>Check your insurance before changing super funds. If you have a pre-existing medical condition or are over age 60, you may not be able to get the cover you want.<\/p>\n<h3>How to check your insurance through super<\/h3>\n<p>To find out what insurance you have in your super you can:<\/p>\n<ul>\n<li>\n<p>call your super fund\u00a0<\/p>\n<\/li>\n<li>\n<p>access your super account online\u00a0<\/p>\n<\/li>\n<li>\n<p>check your super fund\u2019s annual statement and the PDS<\/p>\n<\/li>\n<\/ul>\n<p>You\u2019ll be able to see:<\/p>\n<ul>\n<li>\n<p>what type of insurance you have<\/p>\n<\/li>\n<li>\n<p>how much cover you have\u00a0<\/p>\n<\/li>\n<li>\n<p>how much you\u2019re paying in premiums for the cover\u00a0<\/p>\n<\/li>\n<\/ul>\n<p>Your super fund\u2019s website will have a PDS that explains who the insurer is, details of the cover available and conditions to make a claim.<\/p>\n<p>If you have more than one super account, you may be paying premiums on multiple insurance policies. This will reduce your retirement savings and you may not be able to claim on multiple policies. Consider whether you need more than one policy or whether you can get enough insurance through one super fund.<\/p>\n<p>When reviewing your insurance in super, see if there are any exclusions or if you\u2019re paying a loading on your premiums. A loading is a percentage increase on the standard premium, charged to higher risk people. For example, if you have a high-risk job, a pre-existing medical condition or you\u2019re classified as a smoker.<\/p>\n<p>If your super fund has incorrectly classified you, contact them to let them know. You could be paying more for your insurance than you need to.<\/p>\n<h3>Making a claim on insurance in super<\/h3>\n<p>To make a claim for insurance through your super fund, see\u00a0<a href=\"https:\/\/moneysmart.gov.au\/how-life-insurance-works\/making-a-life-insurance-claim\" target=\"_blank\" rel=\"noopener\">making a life insurance claim<\/a>\u00a0for more information or simply call us on [phone].\u00a0<\/p>\n<p><span><span style=\"font-size: 10px\">Source:<br \/>Reproduced with the permission of ASIC\u2019s MoneySmart Team. This article was originally published at\u00a0https:\/\/moneysmart.gov.au\/how-life-insurance-works\/insurance-through-super<\/span><span><\/span><\/span><\/p>\n<p><span style=\"font-size: 10px\">Important note: This provides general information and hasn\u2019t taken your circumstances into account.\u00a0 It\u2019s important to consider your particular circumstances before deciding what\u2019s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete.\u00a0You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.\u00a0 Past performance is not a reliable guide to future returns.<\/span><\/p>\n<p><span style=\"font-size: 10px\">Important<\/span><br \/><span style=\"font-size: 10px\">Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents\/information contained within the linked site(s) accessible from this page.<\/span><\/p>\n<p>The post <a rel=\"nofollow\" href=\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/latest-articles\/a-financial-safety-net-through-super\">A financial safety net through super<\/a> appeared first on <a rel=\"nofollow\" href=\"https:\/\/mlcsocialfeed.p2.clientcommunity.com.au\/\">MLC Contemporary<\/a>.<\/p>\n<\/div>\n<p class=\"wpematico_credit\"><small>Powered by <a href=\"http:\/\/www.wpematico.com\" target=\"_blank\" rel=\"noopener\">WPeMatico<\/a><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Most super funds offer life, total and permanent disability (TPD) and income protection insurance for their members.\u00a0 When reviewing your&#8230;<\/p>\n","protected":false},"author":4,"featured_media":7916,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - 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