Insurance as part of your superannuation
Life, TPD and income protection insurances are all offered within superannuation. If your insurance is held within superannuation, the cost of the premiums is withdrawn from your superannuation balance.
It is important to work out the best way to structure your insurance, whether inside or outside superannuation, or a combination of the two.
Benefits to having insurance in your superannuation may include:
- Automatic acceptance – there’s generally no need to complete medical checks
- Cheaper cover – from the bulk discount typically available to superannuation funds
- Tax deductibility – some contributions to superannuation attract a tax deduction, so you may be able to pay your premiums by making tax deductible super contributions.
Disadvantages of having insurance in your superannuation include:
- Limitations on the types of cover available
- Potential delays in the payment of benefits in the event of death, and
- High tax rates – superannuation death benefits paid to a non-dependant may be taxed at up to 32 per cent.
Interested in more information? Contact us today.