Did you know you may be able to get low-cost insurance through your super fund? In fact, default funds are obliged by law to provide a minimum level of cover. Despite the peace of mind insurance offers and its potential to make a huge difference to people’s lives, many people remain under-insured and aren’t aware of the insurance options available to them.
If you’re thinking about getting some insurance to protect you and your family, it’s worth checking out what’s on offer from your super fund as they do tend to offer very competitive premiums. You may even discover you already have insurance through your super you weren’t aware of.
What kinds of insurance are offered through super?
If your super fund offers an appropriate level of cover for your needs, it can be a really simple and cost-effective way to insure yourself and your family.
The main insurance types offered by superannuation funds include:
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Life insurance
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Total and permanent disability (TPD) insurance
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Income protection (IP) insurance
Download a copy of the guide Super insurance explained.
Life insurance
If you hold life insurance (also known as death cover), the beneficiaries you nominate on your policy, usually your family, receive a benefit in the event of your death. Depending on the rules of the super fund, this money can be paid to them either as a lump sum or as an income stream, and provides them with financial support to ensure they can continue paying the bills after you’re gone.
Choosing life insurance is a big decision and you need to be realistic about how much cover you need. Consider factors such as how much debt you have, and how much your family will need to maintain their lifestyle both now and in the future.
Total and permanent disability (TPD) insurance
TPD insurance provides a financial safety net if you become seriously ill or permanently disabled and are no longer able to work. TPD insurance is designed to help cover the costs of rehabilitation as well as support the future cost of living.
It is important you check how your insurer defines TPD before taking out a policy as each insurer generally has its own definition. Usually TPD is defined as either:
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When you can no longer work in your usual occupation; or
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When you can no longer work in any occupation.
Income Protection (IP) insurance
IP insurance provides you with income for a certain period if you can’t work due to a temporary disability or illness. Unlike Life or TPD insurance, IP insurance covers you just for the income lost through your inability to work. For families or individuals who rely heavily on one income to meet expenses, IP insurance can be an extremely important consideration.
Again, each policy differs in how it defines disability and illness and the type of benefits offered, it’s important to make sure you fully understand what you’re getting.
Generally, IP insurance will offer coverage up to a maximum of 75 per cent of your wage for a maximum amount of time – this could be two or five years or until you’re 65.
Please contact us on Phone (02) 4365 4275 if you seek further assistance .
Reproduced with the permission of the The Association of Superannuation Funds of Australia Limited. This article was originally published at http://www.superguru.com.au/manage-your-super/insurance-in-super.
Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You 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. Past performance is not a reliable guide to future returns.
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