Your 5-minute guide to insurance in super
EducationArticle5 June 2023
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Your 5-minute guide to insurance in super
Insurance in super in 5 minutes
Insurance in super, an easy guide
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Your super fund can give you access to life and income protection insurance. Here’s what you need to know.
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Types of insurances in super
There are three basic types of insurance that are commonly offered by superannuation funds to their members:
Life insurance
This pays out to your beneficiaries when you die or have a terminal illness. It’s also often called death cover.
Total Permanent Disability (TPD) insurance
This pays out if you become disabled because of illness or injury and are unlikely to work again.
Income protection insurance
This pays a regular income for a set period if you’re unable to work due to temporary illness or injury. This is usually two years but it can be extended.
Making changes to your insurance coverage
The insurance offered to members of a superannuation fund is a default amount, meaning that it may not be right for everyone. If you need additional coverage or want to change the duration of income protection, you should speak with us.
Are there waiting times for claiming on insurance?
If you have just started a new account with your superannuation fund, there may be waiting period before you can make a claim. These can be as long as two years, so be sure to review the relevant product disclosure statement (PDS) or insurance guide.
Some income protection insurance policies require a waiting time from when you claim to when you receive benefits. The longer the waiting time, the less a policy’s premium will likely be.
Who pays for my insurance?
The premium for your insurance policy is taken out of your superannuation balance. This means it is paid by you or on your behalf from money that is generally taxed at a lower rate than your take-home pay.
Can my insurance be cancelled?
Like most policies, if you don’t pay your premium, your insurance can be cancelled.
Recent legislative changes called Protect Your Super (PYS) have made it so that if you do not make a contribution to your fund for a certain period or your balance falls below a certain amount, your policy can be cancelled unless you choose to maintain your cover.
Your fund will attempt to notify you before this happens.
Can I cancel my insurance?
If you do not want insurance provided through superannuation or have multiple policies through multiple funds, you can cancel your insurance policies. You can do this by contacting your fund.
How much insurance do I need?
There is no set answer for the appropriate level of insurance coverage. Some funds provide a limited financial advice service that can provide recommendations based on your unique circumstances, considering things such as your debts and family situation.
Does my insurance policy require a medical exam?
Generally, because these policies are purchased in bulk and provided to fund members, there is no medical exam required. Some changes, such as reducing and later increasing coverage may require more information to be provided for underwriting.
Where can I get more information about insurance through super?
Your superannuation fund is the best place to start to get information about your insurance. You can check the PDS, which is available on its website or through your member portal, or give them a call to learn about the options available to you.
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| Introduction | Your super fund can give you access to life and income protection insurance. Here’s a 5 minute guide to everything you need to know. |
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What are the main types of insurances in super? Life insurance pays your beneficiaries when you die or have a terminal illness. Total permanent disability (TPD) insurance pays if you become disabled because of illness or injury and are unlikely to work again. Income protection insurance pays a regular income for a set period if you’re unable to work due to temporary illness or injury. Can I change my cover? Yes. Super funds offer a default level of cover, meaning that it may not be right for you. Do I have to wait to make a claim? Sometimes. If you have a new super fund there may be a waiting period before you can make a claim. And some income protection insurance is cheaper in exchange for longer waiting times. Be sure to review your product disclosure statement. Who pays for my insurance? Premiums are taken out of your super account and are taxed at a lower rate than your usual take-home pay. Can my insurance be cancelled? Yes, if you don’t pay your premium for more than a certain period or your balance falls below $6,000 your insurance can be cancelled. Can I cancel my insurance? Yes. How much insurance do I need? This depends entirely on your individual needs. Some funds provide a limited financial advice service that can provide recommendations. Does my insurance policy require a medical exam? These policies are purchased in bulk so there’s no medical exam required. |
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| Body | So we’ve combined everything you need to know about life insurance in a cheat sheet. It’ll take five minutes. |
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This information provides an overview only on specific topics and may be limited in scope or subject to qualifications and generalisations. It is provided for your use with insureds and superannuation fund members.
The information provided is also designed to be provided to insureds and superannuation fund members under your own name and any applicable licenses. You will need to consider whether the information is required to be changed or qualified in doing so. To the extent that there is inconsistency between the information on this website and the relevant policy, the policy will take precedence. You should take professional advice and review the appropriateness of the information before it is used by you.
This information does not consider any specific personal needs, objectives, or financial circumstances.
© Zurich Australia Limited ABN 92 000 010 195, AFSL 232510. Information within it is current as at May 2023 but may be subject to change. Updated information will be available by contacting Customer Service on 131 551.
