Around 83% of those with superannuation opt to sign up for the life insurance offered. For those who do decide to take the life insurance option, or for those who are wondering if they should, let’s take a look at 5 advantages of having life insurance through your super.
You probably won’t need a medical examination
Those who are older or who have pre-existing medical conditions can at times have trouble obtaining a regular life insurance policy outside of their super. The good news is that most superannuation life insurance policies do not require a medical exam, making the policy easier to get.
Premiums are taken automatically
We’re all busy and the less we have to worry about whether or not bills are paid on time, the better. If you have life insurance through your super, the premiums are deducted automatically from your pay. You don’t have to think about this transaction, therefore it frees up more time to spend on your other obligations.
Super insurance policies come with added benefits
Some super funds come with additional insurance benefits that can be very helpful in the time of need. For example, some policies may come with total and permanent disability insurance and income protection insurance. This means if you ever get hurt or become seriously ill, you have options to protect yourself and your family financially.
You may be able to save money
Some life insurance policies through supers end up being cheaper than insurance policies you would purchase elsewhere. This is because lower rates can be negotiated due to a lot of people being in the super and obtaining the insurance. Rather than buying an individual policy, the policies can be purchased in bulk which passes the savings onto you.
You may be able to get a tax break
When paying for life insurance through your super, there are a couple of options. The first option is that the cost of the life insurance reduces the balance in your super account (the premiums are deducted). The other is that you make a salary sacrifice for the cost of the premium. By opting for the second option, you may qualify for tax benefits, especially if you’re self-employed since you can claim a direct tax deduction.
By knowing the advantages of having your life insurance through your super, you’re better informed to make the right decision for your personal financial situation and your family. As always, remember to seek out information from a professional adviser to make sure your strategies best align with your goals.