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Paying for insurance through super makes a lot of sense. And checking what type of insurance cover you’ve got and how much you’re covered for is definitely worth knowing about too.
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Do you have insurance through your super fund? Josh from the IOOF team tells us why checking out your cover shows your family you care about them.
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Insurance in super usually comes as standard. But you don’t have to have it and you may have to opt-in at some point to get it. If you’re over 25 and have started to build your super, it’s likely that you’re automatically paying insurance premiums from your super balance. This is one reason why it’s a good idea to track your super down and look at bringing it together.
There are different types of life insurance cover you can have through your super. These are usually death, total and permanent disablement (TPD) and income protection cover. They are designed to protect you and your loved ones if you have an accident, get sick or die. It means you could get an agreed sum of money or regular payments to cover costs and living expenses if you can’t work because you’ve become sick or disabled. And the death cover pays a lump sum to help your family or loved ones if you die.
Some types of personal insurance – like trauma cover – are generally not available through your super fund. To arrange this type of cover, you’ll need to speak to a financial adviser or a life insurance provider.
Super is money you’re saving for later. So why would you be using it to pay insurance premiums? There are actually some excellent reasons why this is a common way for Australians to arrange their insurance cover:
We all have a lot of regular payments to make from our income. Our salary has to cover things like grocery and utility bills and our rent or mortgage. Finding the extra money to pay for insurance cover can be hard, and many would rather go without than add it to their regular expenses. So paying for it through super means you’ll have cover without ‘missing’ the money today. It should be noted that paying insurance premiums from your superannuation account does mean that you will have less money for retirement.
Just like super, which is there to make sure you’ve got savings when you retire, having insurance in case your luck runs out is a way to look after your or your family’s future.
As super funds provide insurance cover to a lot of their members, they’ve got some bargaining power. So you might get the cover you need for a lower premium than you might pay if you go direct to an insurer.
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