super

INSURANCE & SUPER

GET YOUR INSURANCE RIGHT

Most Super Funds offer insurance cover (usually Life and TPD) to their members. Some also offer Income Protection. These policies can be very cost competitive and can provide insurance for people who may not be able to get insurance elsewhere. However, if you need to change funds, you will need to reconsider your insurance arrangements.

Are you paying for Insurance you don't need?

Insurance options in Super Funds are generally limited and most funds don't offer Level Premiums which can provide significant lifetime savings. Many funds offer insurance on an opt-out basis; that is you pay for it until you tell them you don’t want it. Check you are not paying for insurance you don’t need.

We don’t believe that you should choose a fund based solely on insurance arrangements. However insurance may be a reason not to change an existing fund investment.

Can I pay for my Insurance from my Super?

Using your Super to pay for your insurance can be attractive and you are not limited to the insurance provided by your fund. In most cases you can choose the cover and the insurer that best meets your needs AND use your Super to pay for it. If you pay for your Insurance from your Super, you can get the cover you need without affecting your day to day spending. Even better, is a tax benefit that makes your policy more affordable (to the tune of 15-25%).

Sherpa says: If you don't want the cost of insurance to eat into your retirement savings, make additional Super contributions through salary sacrifice to cover the premiums. This can give you the best of both worlds - the right cover with Tax savings and a healthy retirement fund.