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Understanding Superannuation Linked Life Insurance

Is Life Insurance Through Superannuation Right for You?

Superannuation-linked life insurance combines life insurance coverage within and outside your superannuation fund. This dual structure offers comprehensive protection, linking internal superannuation benefits with external insurance features.

Why Opt for Life Insurance Through Super?

For many us, integrating life insurance with superannuation is a strategic move, driven by employer arrangements or to improve cash flow management. It’s a smart way to ensure you and your dependents are financially secure in the face of health issues, accidents, or other unforeseen events.

However, it’s important to recognise that life insurance within superannuation might not offer all the benefits of a standalone policy. The insurance market has responded by providing ‘linked’ policies, allowing for basic coverage through superannuation and additional features externally, typically with the super fund covering the bulk of the premiums. This structure is designed to maximise the coverage while keeping it cost-effective.

What Life Insurance Options are Available in Superannuation?

Not every type of life insurance fits within the superannuation framework due to the Superannuation Industry (Supervision) Act’s regulations, which aim to ensure superannuation serves primarily as a retirement benefit. Currently, Term Life Insurance, Total and Permanent Disability (TPD) Insurance, and Income Protection Insurance (under the guise of Salary Continuance) are permissible within super funds.

The Case for Life Insurance

With Australians facing an underinsurance issue, the question of whether to have life insurance is more relevant than ever. Life insurance serves as a crucial safety net, offering financial protection when it’s most needed. Despite the perceived high cost of premiums, especially for those in good health, leveraging superannuation for insurance can make this essential coverage more affordable.

Getting Expert Advice on Superannuation and Insurance

At Continuum Financial Planners Pty Ltd, we recommend a proactive approach to your insurance needs, including regular reviews of your coverage level, policy type, and the policy’s structure. Whether you’re juggling multiple super accounts with insurance or considering your options, our team is here to provide expert advice tailored to your situation.

Ready to Review Your Insurance Strategy?

If you’re exploring the idea of superannuation-linked life insurance or seeking to optimise your current coverage, contact us at (07-3421 3456) or via our website. Our advisers are committed to understanding your needs and delivering personalised solutions to ensure your financial security now and in the future.

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