Join our investing community

Super and personal insurance

Discussion in 'Superannuation, SMSF & Personal Insurance' started by scys, 17th Jun, 2008.

  1. scys

    scys Member

    Joined:
    31st May, 2008
    Posts:
    8
    which is a better option to when taking out personal insurance cover?
    1. within superannuation fund or
    2. stand alone product?

    Thanks.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Within a super fund is generally cheaper - you can use tax effective dollars in your super fund to pay for it. Provided that the insurance offered by your fund is actually suitable for your needs of course!
     
  3. Compleks

    Compleks Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    348
    Location:
    Melbourne
    I got the standard death and permanent disability insurance.

    Once my fund is active I'm considering upgrading and adding the salary continuance insurance, since my line of work relies quite largely on my health.
    Is it a good idea to cover yourself entirely from your super fund?
     
  4. bigbuddha

    bigbuddha Well-Known Member

    Joined:
    17th Jan, 2007
    Posts:
    73
    Location:
    Brisbane, QLD
    I can't see to much wrong with having your "term life" cover through super as well especially considering that there are no more RBL issue's with super anymore. thank goodness.

    However, superannuation limits who may recieve the benefits and also depending on who the beneficiary is, there maybe tax applicable

    TPD cover can be slightly trickier, in that I believe that TPD has only a "any occupation" version. Also the payments are taxable.

    There's a few other things as well, like Income Protection in super generally is a cut down version
     
  5. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi BigBuddha,

    It's more a case of outside of super you can have the bells and whistles, like paying family bedside costs if your far from home. As opposed to a cut-down version. Similar to getting leather seats for your car or not, and course they charge you extra for the extra options!

    You usually find that the insurance from a product provider is the same inside or outside super (apart from obviously the bells and whistles). Same dollar cost but like Sim said your super can claim a tax deduction for life and TPD premiums whereas you cannot. This makes it more tax-effective, also if you can take advantage of the govt co-contribution this lets the government pay for your insurance premiums ;)

    Unfortunately for Compleks, trauma cover isn't available inside superannuation as it doesn't meet the sole purpose test.

    Cheers,

    Dan

    PS This is general information and does not take into account personal situations for superannuation or insurance purposes.
     
  6. Compleks

    Compleks Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    348
    Location:
    Melbourne
    My Super fund just opened. At the moment I have the Standard death cover:
    "Death Cover: $100,000.00 to your beneficiaries in event of your death. Premium $9.90/ month"

    Do you think it would be wise of me to upgrade to:
    "Standard Death Cover and Total & Permanent Disability (TPD) cover of $100,000.00"
    "Premium $12.10 per month for Death Cover and TPD Cover"

    I'm also considering applying for Salary Continuance Insurance (SCI).

    Will the extra insurance be a worthwhile addition. Are the fees reasonable?
     
  7. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Compleks,

    You'd have to compare against other funds to see whether it's competitive.

    Cheers,

    Dan

    PS Before making an investment or insurance decision speak to your FPA registered Financial Planner.