Super Time to Review Insurances

Posted on January 28th, 2014 · Posted in News

Changes to superannuation rules make now a good time to have a look at your insurance cover within super.  Protecting your family from financial pain if you die or become disabled does not cost a lot of money – and even can appear free – within super, yet research constantly finds that Australians are underinsured.

Slater & Gordon superannuation lawyer Andrew Weinmann says insurance is “the forgotten area” of super and most people have very little understanding of it.  Put simply, people can get a lump-sum payment if they die or become totally and permanently disabled (TPD), or receive ongoing payments through income protection insurance if unable to work.

“Having the right amount of insurance provides peace of mind,” Weinmann says.  “It is usually much cheaper to get insurance through your super fund than to buy it direct from an insurer. Still, you should check that you are getting good value. The difference in premiums between super funds can run into thousands of dollars each year, and the most expensive insurance is up to 20 times the cost of the cheapest.”

When buying insurance through super, your monthly premiums can effectively be paid by your compulsory employer super contributions flowing into your fund. This means no money is coming from your pocket or household budget, although advisers often recommend you add a little extra money to super to top up the nest egg.  Weinmann says rule changes this month have made it compulsory for super funds to provide death and TPD insurance to members of their basic MySuper products, on an opt-out basis.  “MySuper is the new super account that most funds will offer as the default option.”

The Australian Securities and Investments Commission’s website says insurance through super is often cheaper because the funds buy it in bulk, but people should first check if the super fund has any limits on the type of insurance or cover available.

The New Year is a time when many of us reflect on our financial situation, including our insurances & superannuation, and set financial goals for ourselves and our families for the year ahead.  Sean, Belinda and the team are ready to assist you to reach these goals.  Contact us today for a FREE finance review and start the year off knowing where you are headed.










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