What does insurance through super cover for you?

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What does insurance through super cover?

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Here’s what you get from cover through super

Cover through super offers a lot

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You may know that your super offers you insurance but understanding all of its benefits can be a really useful if you ever need to claim.

The biggest benefit of having your insurance through super is that the premiums can be deducted from your super balance. This means you’re not paying out of pocket, which is a nice benefit. And as your super contributions are generally taxed at a lower rate than your take-home pay, you’re saving a bit more money.

On top of this, life insurance policies purchased through super are usually significantly cheaper than you’d be able to get if you went shopping for a policy on your own.

Another benefit of insurance through super is limited underwriting. In a nutshell, this means that the fund buys insurance policies in bulk and the insurance companies make assumptions about the people they will be covering. This means you probably won’t need a medical exam. 

Life insurance is more than just about a payment if you die unexpectedly. There are also policies that provide an income if you’re unable to work for a period due to illness or injury or are declared permanently disabled and never able to work again.

Seriously, why am I reading about life insurance?

While the future may seem far away, time has a way of sneaking up on you. When you’re working full time; starting a family; or even making choices about where to live, you have to balance a lot of responsibilities.

What would happen if everything suddenly came screeching to a halt through accident or illness and you can’t work? This is where life insurance can come in. It’s there for the unexpected.

Think about it this way: If you’re about to get into a car accident, you can’t stop time to get insurance. The same goes for your life. You don’t want to wait until you have an accident that makes you miss time from work – or not be able to work at all – before you get insurance.  

The money from your insurance can help pay your rent or mortgage to keep a roof over your head and keep food on the table when you’re not able to provide an income. You’d be shocked how fast you burn through your savings when you’re trying to provide for your family without any money coming in. And, what would happen if you’re sick or injured for years? What if you can never work again?

Also, your insurance isn’t just for you. Death cover, for example, can take care of things such as funeral expenses as well as provide for your loved ones and family who rely on you. 

Life insurance case study

Jules is 37 years old and works as a project manager. She and her partner Ashley had 4-year-old twin girls and a $500,000 mortgage on a unit.

In 2019, Jules was in a car accident that required multiple surgeries; she couldn’t return to work for several months.

By making a claim against the income protection insurance from her superannuation account, Jules was able to receive an insurance payment of 70% of her ordinary wages for the time she was off work. This helped the family keep up on expenses such as the mortgage and keep the kids in childcare so her partner could continue to work.

Having the claims process managed through super meant there was a dedicated claims specialist there to provide advice through the entire process so that Ash could keep focus on the kids while Jules focused on getting better.