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Insurance through your super: It could be a more cost-effective option.

Insurance through your super: It could be a more cost-effective option.

Your super fund can do more than safeguard your retirement – it may also be a cost-effective way to purchase insurance.

Is Death and Total and Permanent Disablement (TPD) cover for me?

If you have any debt, or if there are people who depend on you financially, death and TPD insurance can help cover you or your beneficiaries for unexpected costs. These include medical or funeral expenses if you die, are in an accident, or fall ill and are unable to work again.

How can I purchase Death and TPD cover through my superfund?

Some superfunds offer insurance options as an additional service, but with Essential Super you can be protected with:

  • Death cover – Paid in the event of your death or terminal illness
  • Total and Permanent Disablement (TPD) – Paid if you become totally or permanently disabled.

The default cover, which is based on your age is set up automatically if you open an account in a branch or if you open an account in NetBank, you can simply select the default insurance cover option. Insurance will be available if funds are in your super account within 120 days of opening the account and you’re under age 61.

Why is it beneficial to get insurance through your super?

  • It can be cheaper – Superfunds tend to purchase insurance policies in bulk, and may pass on the savings to their customers.
  • It’s tax-effective – Your premiums are paid from your pre-tax salary from your superfund account, not your take home pay.
  • It provides reassurance – Your insurance will be there for you if you ever need it.
  • You can set and forget – Premiums will be automatically deducted from your superfund account once you’ve set it up, providing there are funds in your account within 120 days

Can I cancel or change my insurance cover?

Of course. The amount of default cover you get depends on your age, but you can easily cancel, halve or double your cover at any time either in NetBank or by calling 13 4074. If you want to double your cover, you’ll need to answer some simple health and lifestyle questions.

Important considerations

  • Insurance premiums will reduce your super balance – keep in mind that you’re paying your insurance through your superfund, which will reduce your retirement funds unless you replenish it.
  • You can’t transfer the insurance to a new superfund – if you change superfunds, you will need to set up new insurance cover.
  • Note the age limits – cover through your super ends when you reach 70 years of age.
  • If you leave Australia permanently and stop being an Australian resident, your insurance stops too.

Considering whether purchasing life insurance through super is the right approach for you? Find out if Essential Super can provide insurance to suit your needs.

Things you should know: This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Colonial First State Investments Limited ABN 98 002 348 352, AFS License 232468 (Colonial First State) is the Trustee of Commonwealth Essential Super ABN 56 601 925 435 (Fund) and the issuer of interests in Essential Super which is a product of the Fund. A Product Disclosure Statement (PDS) for Essential Super is available from or by calling 13 4074. You should read the PDS and assess whether the information is appropriate for you and consider talking to an independent financial adviser before making an investment decision. Colonial First State is a wholly owned subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 (‘the Bank’).The Bank provides certain distribution and administrative services to the Trustee. The Bank and its subsidiaries do not guarantee the performance of Essential Super or the repayment of capital by Essential Super. An investment in Essential Super is via a superannuation trust and is therefore not an investment in, deposit with, or other liability of the Bank or its subsidiaries. An investment in Essential Super is subject to risk, loss of income and capital invested.