Many people have limited amounts of life insurance, including some form of life cover, salary continuance and TPD within their superannuation.
If you have life insurance in your super fund, it’s a good start. But generally, this is unlikely to be enough cover on its own:
- Cover held by people with life insurance through their superannuation actually represents only 20% of the cover they need*.
- Often the Life Cover and TPD sums insured under a group scheme are classed as 'a reducing contract', meaning the sum insured reduces as you get older.
*IFSA - Rice Walker Fast Facts: A nation exposed! Underinsurance key facts, August 2005
As with all insurance, it is essential that you work with your adviser to ensure you identify any gaps in your insurance cover. Together you can determine the best strategy to cover these gaps, which may mean increasing or changing your insurances.
Points to consider when reviewing your insurance:
- Is the sum insured adequate?
- Is the waiting period and benefit period on your salary continuance policy appropriate?
- Will you receive a lump sum payment for a serious medical condition?
- Does your superannuation allow you to keep your insurance if you leave your employer?
- Does your policy include extra benefits you may need if you make a claim such as rehabilitation benefits for Income Protection or funeral advancement benefits for Life Cover insurance?
- Is your plan’s design consistent with your intentions in your Will? Death Benefit payments under super are treated differently for tax purposes depending on the category your beneficiaries fall into.
> Myth 1 - I'm young and healthy. I don't need insurance.
> Myth 2 - Insurance is too expensive
> Myth 4 - My private health insurance gives me all the cover I need
> Asteron life insurance and wealth protection solutions
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