Save Money with Life Insurance through Super

The Pros and Cons of Life Insurance through Super

By insurancefocus,

So you’ve decided to get life insurance to protect your family. But you might be worried about paying out monthly premiums without seeing a return on your investment in your lifetime – particularly if your budget is already stretched.

Well, there’s an answer: holding your life insurance in your superannuation (retirement savings investment fund). While holding life insurance in your name is more likely to result in a direct, tax-free and certain payout to your beneficiaries after you pass away, you also stand to lose a lot. For example, you won’t get a tax deduction on the annual premiums you pay. If you choose to hold your life insurance in your superannuation fund, this tax deduction comes within your reach.

And the best thing is, because your superannuation fund pays those premiums, you’ll be covered without eating into your family budget. When it comes to life insurance, the super option is more than likely the most affordable one for you.

Why using your Superannuation fund is a good idea

While there are some possible issues with this route – such as a trustee delaying the payments after your death, and tax being charged if your beneficiary is a non-tax dependent – there are many more benefits:

  • You can choose the amount you want to be covered for
  • You don’t miss out on cover for you and your family even if you’re financially stretched
  • It’s easier: there’s one less thing to manage in your busy life because premiums are automatically deducted
  • You can receive a tax deduction for your premiums

Basically, while your pension won’t be released to you till retirement, with life insurance through super funds, you can pay an annual premium and get the benefits now.

Covering all the bases

As well as life insurance, super funds can also offer you Total and permanent disablement and income protection cover.

Deciding if insurance through super is right for you, working out how much cover you need and whether your super fund will offer the full amount is complex. Plus, the process of comparing the costs and conditions of cover between different providers can be time-consuming and confusing. We can help you to make sense of the bigger picture and get a competitive price on life insurance through super funds


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