Life Insurance in Superannuation

Many Australians feel their life insurance needs are met by their superannuation fund policy, as many as ‎83%1 of super members sign up for the default life insurance cover offered by their super ‎fund. This may seem like a convenient option for some, however there are several things that all consumers should keep in mind when considering life insurance.

Often default life insurance provided within a super fund may only offer $100,000 or $200,000 worth of cover 2. A 2008 survey by the Australian Institute of Superannuation Trustees (AIST) and Industry Funds Forum (IFF) revealed that ‘one in two industry fund members were underinsured by $100,000 or more’.

Consumers are advised to check their super fund(s) to see what level of cover they have in place. Would it be enough to protect their families if the worst were to happen? Would it cover the mortgage, household bills, car repayments, groceries and other daily expenses?

A separate or additional life insurance policy can offer your family additional protection if the worst should happen, meaning that you can have peace of mind knowing your family will be looked after well into the future. Many direct life providers now offer levels of cover up to $1.5 Million (depending on your age).

It’s also worth considering what types of insurance are available inside superannuation arrangements as some may only be available outside of superannuation. A good example would be Critical Illness or Trauma Insurance. This type of insurance cover provides a lump sum payout if you are diagnosed with a specific critical illness, such as cancer or a heart attack, which can have a significant impact on you and your family in the form of medical costs or the inability to continue to work whilst undergoing treatment.

Ultimately life insurance is invaluable as it can assist you or your family at a time when you or your family at a time when you need financial assistance the most.

Consumers are advised to review their life insurance policies and understand what they are covered for. Making sure you have the right cover will ensure that your family will be taken care of when they need it most.

1Canstar, http://www.canstar.com.au/superannuation/life-insurance/
2Canstar, http://www.canstar.com.au/superannuation/life-insurance/

Important note:
The insurance is issued by Allianz Australia Life Insurance Limited ABN 27 076 033 782, AFSL 296559. The information contained on this website is general information only. It does not take into account your individual objectives or financial situation. You should therefore consider the appropriateness of the insurance having regard to your objectives, financial situation and needs. Prior to making any decision you should read the Allianz Life Plan Product Disclosure Statement and Policy Document (PDS). You should seek advice from your financial adviser before deciding on appropriate insurance cover.
1Cover Pty Ltd ABN 91 105 954 265 is an authorised representative of Allianz Australia Life Insurance Limited ABN 27 076 033 782 AFSL 296559 (Allianz Life). Life Insurance is issued by Allianz Life. 1Cover Pty Ltd act as an agent of Allianz Life not as your agent. Any advice here does not take into consideration your objectives, financial situation or needs, which you should consider before acting on our recommendations. You should read and consider the Product Disclosure Statement before deciding whether to acquire any product mentioned here. Available at www.1Cover.com.au 1Cover Pty Ltd receives commission on these products that is a percentage of the premium paid for each policy ranging from 10% to 20%. Minimum premiums may apply. Any discounts/entitlements only apply to the extent any minimum premium is not reached. If you are eligible for more than one, we also apply each of them in a predetermined order to the premium (excluding taxes and government charges) as reduced by any prior applied discounts/entitlements