Life Insurance in Superannuation - Is It Enough Cover?
Us Aussies are very lucky to have an established superannuation government legislation, where employers contribute to your retirement fund and providing peace of mind for the future. But a lot of Aussies don’t know that their superannuation can also provide some coverage and will quite often have a life insurance and TPD insurance component included in it. Well you do! Premiums are automatically deducted from your super balance, reducing your future retirement funds so you want to make sure you have the right life insurance for your needs.
Of course, the next questions are always ‘Do I have enough life insurance in my super?’ and ‘What is the best life insurance cover for my needs?” Billy Explores has done some digging and we’ve got the answers to the most important questions! Read on to find out then find out why you should compare life insurance through Billy Explores, even if you already have life insurance in your super!
Not Many Aussies Know They Have Life Insurance Included In Super
Speaking on ABC Melbourne Drive radio recently, Jane Eccleston, ASIC’s Senior Executive Leader of Superannuation, said many Australians are not even aware they hold insurance through their super fund.
‘Many Australians have insurance through their superannuation – almost 10 million superannuation accounts have insurance’, Eccleston says.
‘While there are benefits in having insurance in your super, it’s worth remembering that you ARE paying for it from your super account and it’s reducing your super balance. And if you have multiple super funds, you’re likely paying multiple insurance premiums.
‘It all comes down to your personal circumstances and preferences. We encourage listeners to check if they’ve got insurance with their super fund and what they’re covered for.
Types of Life Insurance in Super
Most super funds automatically provide as part of your super:
- life cover (or what is commonly called death cover) (which pays a lump sum if you die) and
- total and permanent disability (TPD) insurance— which pays a lump sum if you become totally and permanently disabled because of illness or injury.
Some super funds will also automatically provide income protection insurance – which pays some of your income if you can’t work for an extended period of time due to illness or injury.
Will The Life Insurance In My Super Give Me Enough Coverage?
Most super funds offer default insurance, which means it is not tailored to any member’s particular circumstances. This means your individual requirements are not taken into account, such as family and other financial obligations.
‘It’s worth taking the time to understand what cover you may need in light of your personal situation and responsibilities, for example, whether you have dependents or a mortgage or other debts. ASIC’s Moneysmart’s life insurance needs calculator can help work out if you need life cover and how much you might need’, Eccleston says.
A great way of making sure you do have enough coverage in your super life insurance policy is of course to compare life insurance providers through Billy Explores! Our panel of providers take into account all of your personal situations and get the best value life insurance policy for your needs.