5 things you need to know about insurance in super

Welcome to another article in our series crafted for our members.

Five things you need to know about insurance and your super

1. With insurance through your super you can protect your income and prepare for the future.

2. If you do get insurance through your super the cost for the insurance cover is taken from your super balance.

3. GuildSuper offers three types of insurance cover to protect you and your loved ones:

  • Death (including Terminal Illness)
  • Total and Permanent Disablement
  • Income Protection

4. Once you reach age 25 and have more than $6 000 in your account, unless you tell your super fund otherwise, you may get automatic insurance and the fees will automatically come out of your account.

5. You can cancel or apply to change your insurance cover anytime.

We’re back with Claire, this time talking about insurance as it relates to your super

Remember Claire? (aka, your FBF, financial best friend) - when we last caught up with her we talked about investments in super, now we catch up with her talking to Gen (a Guild team member), about what you should know when it comes to insurance and your super.

Claire: You were so helpful last time, when talking about investments, I was wondering if I can ask you now about insurance cover in my super?

Gen: Of course you can! It’s a great topic, because with insurance through your super you can protect your income and prepare for the future.

Claire: What are the benefits of having insurance through my super?

Gen: Insurance can give you peace of mind, as it provides financial support to protect what’s important to you if you die or have to stop work due to illness or injury.

It's also really convenient - if you’re eligible, GuildSuper will provide you with insurance cover automatically when you join and deduct fees from your super so you don’t have to remember to pay for it.

Claire: That sounds great, the less I have to worry about the better.

Gen: Generally speaking it can also be cheaper. This is because GuildSuper buys life insurance in bulk. This means that it can be a cost-effective way for you to purchase and pay for insurance.

Claire: What else do I need to consider?

Gen: It is important to know that if you or your employer stop making contributions, your insurance fees will continue to be deducted from your super balance. However, you can cancel or apply to change your insurance cover anytime.

Claire: Does that mean if I have a small balance the fees may eat into it?

Gen: Yes, this is because if you do choose to get insurance through your super the cost for the insurance cover is taken from your super balance. Some of our members choose to add extra to their super to cover the cost of fees.

Claire: Can you tell me a little bit about the 3 main types of insurance?

Gen: Sure there’s:

  1. Death cover (also known as life insurance) can help ease financial stress by paying a lump sum to your beneficiaries if you die or to yourself if you become terminally ill. Your cover is age-based, so the amount and cost of it will change as you get older. The Death cover benefit is made up of your super account balance and any insurance benefit you may hold with Child Care Super. The maximum insurance component of Death cover you can have is $5m.
  2.  Life’s unpredictable. Total & Permanent Disablement (TPD) cover can pay you a lump sum if you become totally and permanently disabled and can’t work anymore. It can help you pay for rehabilitation, any debts you have and the future cost of living. TPD usually means that you have an ongoing and serious injury or illness, which you are unlikely to recover from, which is preventing you from working in any occupation that you are qualified for based on your education, training or experience or from performing daily living activities such as showering and dressing. The maximum TPD cover you can have is $3m.
  3. Income Protection can help if you become ill or injured (at any time) and temporarily can’t work. It provides monthly payments to support you while you’re not earning your regular salary or wage. You get regular monthly payments for a period of up to the maximum ‘benefit period’. This can be two years or five years depending on the situation. Alternatively, members who have approved long term cover will have monthly payments until age 65.

The maximum IP cover you can have is the lesser of $30,000 per month or 85% of your monthly income, 10% of which would be paid at claim time into your Superannuation account

Claire: Wow, thanks what a great summary.

Claire’s Top Insurance Tips

Use the GuildSuper Insurance Calculator to work out how much cover you may need.

Use the GuildSuper Insurance Cost Calculator to help you select the most appropriate cover for you.

Tailor your insurance cover with GuildSuper by applying here

Call GuildSuper, on  1300 361 477 (you may even get Gen) on to talk about your insurance and super.