There are three types of insurance you can hold inside super: life, total and permanent disability (TPD) and income protection insurance. Many super funds automatically insure their members and will provide a (relatively small) payout if, for example, they die or suffer a debilitating accident. But the level of default cover is likely to fall short of your needs.
Canstar found that while young families typically need around $680,000 of life cover, the average default life policy is only $200,000.
Nevertheless, you can pay a little extra to top up your insurance through your super fund if you want more cover.
There are three big advantages to doing this:
- These policies are relatively inexpensive because super funds can buy in bulk and pass on the discount they receive to members;
- These policies are easily accessed. You’ll typically have your application for insurance approved without having to be examined by a doctor or provide detailed medical information;
- You pay for cover from your pre-tax income because the cost of premiums is taken out of the super contribution your employer deposits in your fund.
If you would like to discuss the best insurance solution for your family’s needs, please give us a call.
Photo by Got Credit 
