Your humble super fund isn’t just there to help you save for your retirement. It could also be used to help you protect your family’s current lifestyle. And the good news is that most super funds automatically offer some form of life insurance as part of their packaged offering.


However, many of us are still inadequately insured, should the worst occur.

The ‘she’ll be right’ attitude of Australians has meant that most of us are putting ourselves (and our family) at unnecessary financial risk of illness, injuries or worse. Research shows that 1 in 3 women and 1 in 2 men can expect to be diagnosed with some form of cancer by the time they turn 851 – and that a heart attack occurs every ten minutes in Australia2 – so the numbers are clearly stacked against us.

The numbers are particularly stacked against Aussie women and mums, as they face additional financial risks and hurdles, which have been very well publicised by the current ANZ Women’s campaign.

That’s why we should all have some form of insurance and consider if the automatic levels and types of insurance offered within our super is right for our personal income and debt-repayment needs.


What types of insurance are available within super?

Most super members generally receive automatic Death and Total Permanent Disability (TPD) cover within their fund.

The actual amount of cover will mainly depend on your age. For example, a 35 year old non-manual worker could be covered for $200,000 in the event of death or permanent disability.

Death cover – pays a one-off amount to your surviving spouse, dependants and/or nominated beneficiaries if you pass away or become terminally ill.

Total and Permanent Disablement (TPD) – pays a one-off amount that may be used to cover your out-of-pocket medical expenses, long-term care and home support if you are permanently disabled and can no longer work.

Tip: To find out how much insurance you currently have, start by contacting your super provider.


How much does it cost?

Insurance provider fees can vary quite a bit. And the actual cost of insurance will also depend on personal factors such as whether or not you smoke, and whether or not you are actively employed, to name a few.

However, generally speaking holding Death and TPD insurance within your super fund can be an easy and cost-effective way to pay for insurance premiums as you’re using your before-tax super contributions rather than your after-tax money – which could be taxed at marginal tax rates of up to 49% (including Medicare Levy and Temporary Budget Repair Levy).



What if the cover offered within your super fund isn’t enough?

There’s usually an automatic level of cover offered within most super funds – but this may not be enough, particularly if you have large debts or young dependants.

For example, if you suffered a permanent disability, you might want enough money to pay off your mortgage and/or allow your partner to take time off work to look after you. If you have children, you may want to provide for their remaining years of formal education.

In some cases, you could also obtain extra insurance for certain key events in your life – such as the birth of a child, buying a home, getting married. But you should check with your super fund to see if these additions are offered through your insurance policy.


What other types of cover might be available through super?

In addition to Death and TPD insurance, you may also have access to income protection insurance through your super fund. With this type of cover, you will generally receive monthly payments of up to 85% of your income to help pay for your mortgage, rent or other regular bills, if you become temporarily disabled and unable to work.

It’s worth reviewing your insurance options with a professional adviser as not every insurance policy is the same. Some may offer standard, vanilla terms, and others may offer additional cover that is more aligned to your specific needs.


Additional cover for pregnant women

For instance, some insurers offer additional Death and TPD cover for pregnant members at no additional cost – helping protect against an insured event related to pregnancy or childbirth. So, someone whose default Death and TPD insurance provides cover of $200,000 could be covered for $300,000 during pregnancy, for no additional cost.


Need more information?

To ensure you and your family are adequately covered, Please contact our office today to make an appointment and if you enjoyed this article, feel free to share it with your friends and family. You could also go to our Facebook page and tag those you feel would benefit from this editorial.


1 Australian Institute of Health and Welfare and Australasian Association of Cancer Registries (2012). Cancer in Australia: an overview, 2012. Cancer series no. 74. Cat. no. CAN 70. Canberra: AIHW.
2 Data and Statistics, retrieved 31 August 2014 from Heart Foundation website.
You should not act on the information provided without first obtaining professional financial advice specific to your circumstances. This article contains information from sources believed to be accurate at the time of writing.  This information may be or may become inaccurate.  You should seek your own timely financial advice on the contents of this editorial and not rely on this as advice from the provider. This editorial does not consider your personal circumstances and is general advice only. This information is current as at July 2015. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429.