Insurance within Superannuation

Having insurance cover within superannuation can be advantageous because:

•      Your superannuation fund may be eligible to receive a tax deduction for the insurance premiums paid.  This can result in lower premium costs through having this saving passed on to you.

•      Premiums may be cheaper because of group cover concessions.

•      By placing your insurance cover within superannuation, the premiums are paid from your superannuation account and will not be a burden on your cash flow.

•      Death benefits from your insurance cover held within superannuation will be tax-free if paid to your dependants.

•     Your nominated dependant beneficiaries do not have to wait for your estate to be finalised to receive the benefit.  (It will be paid directly to them by the superannuation fund trustee, usually within 4 to 6 weeks of completion of claim papers.)

The Disadvantages:- Only the super account holder may be insured.  That is, husband and wife cannot be insured on the same policy.  Trauma cover cannot be placed over super as the benefit payment contravenes the "Preservation Rules."