Life insurance offered through super is a good way to protect your financial future and provide for you and your family if something should happen.
Why should I get life insurance through super?
Having your life insurance provided through super is generally a cost-effective way to provide security for your finances and family. Here are the benefits:
- Cost – because funds purchase insurance in bulk, it’s often significantly cheaper than purchasing an individual policy for you
- Tax benefits – because premiums are paid from your super – which is usually taxed at a lower rate than your after-tax income – you save even more money
- Simple management – Premiums are paid automatically by your fund and, in many cases, your fund can help you in the event you need to make a claim
- Automatic acceptance – Members who are enrolled by their employer generally do not require a health check
- Scalable – You can increase or decrease the amount of cover based on your needs.
Things to be aware of
For most people, the life insurance provided through super is an excellent option. There are, however, some things you should know:
- The level of cover and type of benefits may be limited
- If you change funds or stop contributing, your coverage may be cancelled
- Tax may be payable on some benefits; other tax rules apply if you select a beneficiary who isn’t a dependent.
What kind of insurance is available through super?
The three types of insurance that are commonly provided through super include:
- Death cover (including terminal illness) – pays a lump sum to your beneficiaries if you die or suffer a terminal illness.
- Total and permanent disability (TPD) – pays a lump sum if you suffer an illness or injury that means you are unlikely to ever work again.
- Income protection (IP) – pays a monthly income while you are unable to work due to illness or injury. It is paid for a maximum time period (eg. 2 years known as the benefit period), which can be changed to suit your requirements
Death and TPD cover are available as either a fixed-dollar amount or in units. Income protection (IP) is only available in units.
You can choose your own mix of cover however your TPD cannot be more than your Death cover and you cannot hold TPD cover without Death cover.
What is the automatic insurance cover through super?
Members of Australian Catholic Superannuation automatically receive a certain amount of cover, providing you meet the eligibility criteria.
Enrolled by an employer sponsor: You receive Death/TPD and income protection (IP) cover.
Enrolled as a personal member: You will receive Death/TPD cover only. You may apply for IP however a health assessment may be required.
For details of the coverage that you will receive, premiums and conditions, you can review these documents:
What if I want to change or cancel my insurance through super?
If you don’t want the automatic insurance cover, you can notify us using the Change your insurance arrangements form. A copy of this form is provided when new members join the Fund.
Changing your cover – either adding or reducing – is easy.
If you do cancel or reduce your cover and decided to sign up or increase the amount in the future, you will need to apply and be accepted for underwriting by our insurer.
Are there age limits for insurance?
- Minimum age for starting insurance cover is 15
- Maximum age for starting income protection (IP) is 64
- Maximum age for starting Death and TPD cover is 69
- Income protection (IP) cover ceases at 65
- Death and TPD cover decreases over time and ceases at age 70.
Transferring cover from another fund
Like your insurance? You can transfer cover you have with another fund, subject to certain terms and conditions. Download the Insurance application:Transfer cover to Australian Catholic Superannuation form for details.
Additionally, you can convert to fixed or unitised cover and apply for additional types of insurance such as Lifestyle cover. Simply complete the relevant form, included below.
Want help determining the right level of insurance coverage or deciding what to do about transferring your coverage? Schedule a call with our over-the-phone financial advice team, there is no additional charge for members of Australian Catholic Superannuation.