Insurance in Super Funds


#1

I’m attempting to review our life insurance (we have it both inside and outside our Super fund, which is wasting money.)

Have you kept your life insurance in your Super fund? Did you increase it? Have you added TPD or Income Protection (if offered)?


#2

I added the full TPD and Income Protection for my account. It upped the costs, so I pay something like $15 a month, but I’m with a Super fund so the returns I get more than cover that.

I must admit I never really researched it when I chose to do that, so now I’m looking to see if that’s such a good idea myself. I’ll report back if I find anything useful!


#3

I removed all types of insurance from my super. I don’t have kids and i am not married (If this changes i might review the polices and fees), so i don’t see the point of paying the premium. I once had a super account with ANZ and when i changed jobs they opened a new account with a different back. I watched the fees eat up the super and when i requested to move it ANZ made it so difficult to move, the fees dissolved the entire account. Since that, i am very careful with who i bank with and reduce the fees as much as possible.

I am going through the process of reviewing my health insurance. I know people who rely on the public system and they don’t have a problem with how it works.

I hope this gives you a different perspective on things.


#4

Hi @Mrs.ETT,
Insurance is relative to what’s important to you. Deciding on the most cost effective way to fund it one also needs to consider costs and convenience ie underwriting.
Personally I have my insurances within my super as it is a deductible expense to my fund however I also maximise my contributions which are substantially above my insurance premiums.
Level insurance cover while more expensive than stepped cover can cost less over the longer term as premiums don’t rise as stepped insurance does.
I recommend you seek advice from a qualified professional about your important insurance questions. Australian financial planner professionals are bound by best interest legislation and are required by law to put your best interest first.


#5

Thanks everyone. We are most like @Pineapples, and using a couple of calculators it appears we don’t really need life insurance at all. I’m hesitant to drop it all together, but I know it’s ridiculous to be paying for 2 policies. I’d also like to look at income protection.

I’m wading through my 2 x PDS at the moment to do some comparisons.
First problem I’ve realised: we are in our mid-forties. To pick up any extra insurance now needs the full 13 page screening document where they do all but scan your DNA.
Second problem I’ve realised: We’re with HESTA (who I like), but the insurance is with Commbank, and haven’t they just been absolutely appalling in the expose from the Sydney Morning Herald?! Turns out it’s probably not worth much more than the digital ink it’s written in.

I’ll keep researching, I was interested in what others were doing.

@HernandezPrime - love to hear what you find out!
@Peter - I’m not at the stage where I’m ready to find a financial adviser yet, but thanks for the heads up. Also, to skew off a bit, wasn’t that legislation wound back? Or is it going to be wound back?


#6

It’s enshrined in law and not going to be repealed. Has been in since 1st July 2015 @Mrs.ETT


#7

Hi
Just read your post. Are you able to share what calculators you used?
I’m going through the same process now.
Thanks


#8

Hi Enzo,

Thanks for your question. You would have seen my most recent (solicited) post on Noble Oak, but I link to all of the other calculators (AMP, Canstar, Allianz and AAMI) I used in my post “Life Insurance Isn’t Just About You - Or Is It?

Even the Noble Oak calculator tells me that for everything I designated as “essential”, we were over-insured.


#9

Thanks
I’ll check out your site and the calculator.