Most people either cringe or yawn when the word insurance is mentioned but regardless of whether you find it scary or boring, managing risk is a necessity in the world in which we now live. Let’s cover all of the bases to help make your home run as easy as possible.
Home Base - A Super Way to Insure
Most superannuation funds (and all industry funds) offer Life and Permanent Disability Insurance.
There are a number of advantages in holding life insurance inside your super fund.
Super funds can often negotiate wholesale insurance rates, so premiums for their life insurance are often lower than can otherwise be obtained as an individual. In addition, premiums are paid from your superannuation balance. Whilst this reduces your ultimate retirement benefit, the relative effect is usually small, and by relieving the strain on the household budget, you may be able to increase your overall savings. The main advantage of insurance held in super is that the premiums are tax-deductible to the fund, which ultimately reduces your cost of insurance.
When you join a superannuation fund you may be offered a minimum level of insurance. This is rarely enough to provide adequate cover and it’s up to you to request an appropriate level. Depending on your age, medical history and the level of cover you require, you may also need to undergo a medical examination.
When leaving a superannuation fund you should find out what happens to your insurance cover. You may be offered a “continuation option”, which is an ongoing policy provided by the insurance company. If you don’t take this up within the period that the offer covers, you may find yourself without insurance. If this happens, and if there has been a change in your health, it may be difficult and cost much more to obtain replacement cover in the future.
Insurance is a complex area. Policies vary in their detail and insurance companies differ in their approach to processing both applications and claims.
Each type of insurance has a role to play and it is a job for an experienced professional to work out the right amount of each type for you. You should also seek expert advice whenever you consider allowing a policy to lapse to ensure you are fully aware of the potential consequences.
We can analyse your insurance needs and recommend cover that’s right for you and your budget. After all, you don’t want to strike out before reaching first base. Contact us for an obligation free meeting.
This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs.
GTC Financial Services Pty Ltd ABN 69 596 897 575 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523