Insurance options in super

Superannuation is not just a savings vehicle for you to save for retirement. You may also be able to take out personal insurance including life cover through your fund.

Protection through super

As well as being a place to grow retirement savings, your super fund may also offer life cover that can offer financial protection for you and your family. It could also be a cost effective way to pay for insurance cover, as the premiums are deducted from your super balance rather than your take home pay.

Three main types of cover through super

Superannuation funds generally provide members with the option to take out three types of personal insurance:

Life insurance – this provides a lump sum payment to the people you nominate when you pass away. You may also be able to make a claim on your life insurance if you are diagnosed with a terminal medical condition.

Income protection insurance – this type of cover provides a regular payment of usually up to about 80% of your normal wage or salary if you can’t work due to illness or injury. In super you can apply for a maximum of 75% of salary plus Super Guarantee contributions. 

Total and permanent disability (TPD) insurance – this pays a lump sum if you become seriously disabled and are no longer able to work. 

Your most recent superannuation statement should show if you have any personal insurances in place through your fund. If you’re not sure, get in touch with your super fund to find out. 

Who pays for insurance?

When you take out life cover and other personal insurance through your super, the cost of cover (the premiums) is paid out of your superannuation balance.  This could be a cost effective way to pay for insurance cover.

As super funds arrange ‘group’ cover for a large number of fund members, the premiums can be cheaper than if you were to arrange your own, separate insurance directly through an insurer.

Do you have enough cover?

It’s reassuring to know you have life cover through your super (be sure to check this) though you may not have sufficient cover in place to meet the needs of you and your family. 

It is important to think about how much cover you need. If it turns out you are underinsured, you may be able to top up your level of cover through your fund, or consider taking out insurance directly through an insurer of your choosing.

Next: Taking control of your super

Take control of your super today to potentially enjoy a more financially rewarding retirement. By the time you retire, your super could be one of your most valuable assets.
To learn more about insurance options in super, contact us or speak to your financial adviser
What is Superannuation? Superannuation is an investment designed specifically to help you save for retirement. Here are some super basics to get you started.
MySuper offers members a simple, cost-effective super solution that allows easy comparison of MySuper funds. We adjust our BT MySuper investment options for you over time.
We look at why it is important to check your super savings on a regular basis to see how you are progressing towards achieving your goals and prepare for the best.

This information has been prepared without taking account of your personal objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs.

This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.