What cover you can hold in super
- Life (death) cover: a lump sum to your beneficiaries.
- Total and permanent disability (TPD): a lump sum if you can’t work again. Definitions inside super are limited by law.
- Income protection: a monthly benefit if you can’t work due to illness or injury.
When cover switches off
Under the Protecting Your Super and Putting Members’ Interests First rules, default cover generally stops if your account has been inactive for 16 months, and isn’t offered automatically to members under 25 or with balances under $6,000, unless you opt in. Check your fund statement for a letter about this.
Pros and cons
- Premiums come out of super, not your take-home pay.
- Group cover can be cheaper, and may not need health checks.
- But premiums reduce your retirement balance, and definitions can be narrower than retail policies.
- Cover can lapse when you change funds. Check before you consolidate.
Not sure what you have? Look at your latest statement, or book a call.
Quick answers
Does my super fund include life insurance?
Many do by default, but cover can switch off after 16 months of inactivity. Check your statement.
Sources
General advice warning. This article is general information only and does not take into account your objectives, financial situation or needs. Rules and thresholds change; check the sources above. Consider the relevant PDS and our Financial Services Guide and seek personal advice before acting. FinForce is authorised under Financial Force Pty Ltd AFSL 238337. Shay has been authorised since 18 October 2011.