Your superannuation provides insurance for life that is way cheaper than the insurances which are being missold by a few shonky practitioners in the traditional insurance world. The Australian Securities and Investment Commission has released a report that says more than a few insurances policies being offered today are below standard and suits only the purpose of the financial advisors, not the clients.
Insurance within Super
You can cut down the risk of being duped if you get yourself insurance within Super. Unless the circumstance is unusual, you get it nearly hassle-free. Oftentimes, you don’t even have to undergo a medical examination. It is enough to furnish your medical history and there you go!
The reason why it comes cheaper than the traditional insurances is because the Super funds buy insurance at wholesale prices and they come without the burden of “commission payable”.
Benefits of buying insurance within Super
If you are in the habit of forgetting your payments, insurance within Super can be a great help. After all, premiums are debited directly from the Super. Even from the point of view of tax, it is a great aid. Whether you choose to pay the premium from salary sacrifice or the more conventional method of employer contribution, the premium fetches a tax rebate.
A few possible disadvantages
Yes, there are a few things with insurance within Super that can rock your Super boat, too. The premiums you pay can impact your fund’s health; by lessening the amount of money you can invest in the fund. You will also need to talk to an expert and ensure that you are adequately covered. For instance, Trauma insurance is not usually covered in Super-embedded insurance. In fact, you have to be ‘immeasurably’ disabled to get Total and Permanent Disability Coverage when you buy insurance through Super. To reiterate, expert advice is a prerequisite.
What has your experience in regards to “buying within Super” been like?