Give your super the power to protect your family

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, according to Charles Choong from local financial planning practice, Professional Investment Services, "many of us are still inadequately insured, should the worst occur".

Charles says, “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.”

Charles goes on to say, “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.

Additional cover for pregnant women

Charles says, “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.”

“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.”

Contact Us

To ensure you and your family are adequately covered, please contact Charles on 03 9654 9886 or email to firstpacificfs@gmail.com.

Information and Disc

This publication has been prepared by Charles Choong (ARN 244 731) is an Authorised Representative of Professional Investment Services (ABN 11 074 608 558), Australian Financial Services Licence 234 951.

The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Professional Investment Services Pty Ltd (PIS) Adviser before

you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither PIS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions

or actions taken as a result of you acting upon such information.