When it comes to putting life insurance in place, there can be a lot to consider – from how you access cover, to thinking about the types and levels of insurance that’s right for you.
Having the right life insurance in place can provide financial support if you become sick or injured and unable to work; or help to take care of your loved ones if you’re no longer around.
One way you may be able to access life insurance is through your super fund, and depending on your age and account balance, cover may have automatically been provided when you joined.
What types of cover are available through your super?
There are a few different types of cover that may be available: death, total and permanent disablement (TPD) and income protection (IP).
Death cover provides a lump sum payment to you or your loved ones if you’re no longer around.
But what if you’re unable to work due to illness or injury? Well, there are other types of cover that can help provide financial support. IP cover replaces part of your monthly income if you’re temporarily unable to work due to illness or injury, and TPD cover provides a lump sum payment in the event you become permanently disabled. If you become terminally ill, you may be able to apply for a terminal illness benefit.
What are some benefits of life insurance through super?
Because your super fund has arranged cover for a large group of people, it means they might be able to offer lower premiums for you and the other members of the fund, although this will depend on your fund and a range of factors, including your life situation.
When you join a super fund, you may have automatically been accepted for cover without requiring a health check. On the other hand, if you were to apply for life insurance yourself, you may need to provide personal information about your health, lifestyle and occupation.
With insurance through super you pay for premiums directly from your super account, which means you can get cover regardless of your financial situation, while also removing the impact on your monthly cash flow.
OK, so what else do I need to consider?
There are some things you should think about before deciding whether insurance through super is right for you. For instance, the types of insurance and levels of cover available may be limited, and certain exclusions may apply. And because cover isn’t tailored to your circumstances its worthwhile thinking about what you need.
Recent changes to law are affecting the way insurance through super is provided, so there could be cases where your cover is switched off unless you tell your fund you want to keep it.
And with premiums being deducted from your super, you should consider how that will affect your overall account balance, and how much it will leave for you in retirement.
How do I know what cover is right for me?
If you’re not sure what cover you have in place already, or if it’s right for you, you can contact your super fund at any time.
There may be options to adjust your insurance, such as increasing or decreasing your level of cover, or applying for different features or benefits. You may even have an opportunity to speak to a financial adviser who can help you decide what’s right for you.
There are many resources available to help you make an informed decision about your life insurance. A handy place to start could be ASIC’s MoneySmart website, which provides information on a range of financial topics.
Important information: The information in this blog post is of a general nature only and does not take into account your individual needs, objectives or financial situation. Before making any decision about a life insurance product you should consider the relevant Product Disclosure Statement and seek professional advice before deciding whether it is suitable for you. This blog post has been prepared by TAL Life Limited ABN 70 050 109 450, AFSL 237848, an issuer of life insurance. Current as at February 4 2020. © 2020 TAL Life Limited.