How to check your insurance

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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Stay protected with super

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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Extra protection in super

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.

What is life insurance anyway?

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.

Life insurance in super explained

Read on for the low down on what sort of insurance cover you can get through your super:

Life insurance (Death cover) – is pretty simple. You pay a regular premium to get an agreed lump sum paid if you die, or if you’re diagnosed with a terminal illness. The amount is paid into your super account and your death benefit would be processed from there.
Generally, the higher the amount you want your loved ones to get when you die, the higher the premium you’ll pay. You can use our cover calculator to get an idea of how much is the right amount for you.

Total and permanent disablement (TPD) – TPD is like Death cover but the lump sum is paid to you if you suffer an illness or injury that leaves you disabled, or with limited capacity to work and/or care for yourself.

Income protection – this type of insurance cover is designed to replace a part of your income if you can’t work for a while because of illness or injury. After a waiting period, you’ll get regular payments at an agreed percentage of your salary, for a limited period of time.

Why pay for my insurance from my super?

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.

Do I have the right insurance cover through super and is it enough?

Getting your cover right in super starts with checking what you already have. If you haven’t already, register for access to your super account online and login to check what type of policies you have and how much cover you have.
Once you’ve checked, you might get to thinking about whether the money you or your loved ones would get if something happens to you is enough. The type of cover and the amount you need can depend on lots of things from your age to whether you have kids and/or a mortgage.
Our cover calculator is a simple tool to help you get a ballpark idea of the insured sum that’s right for you.