How life insurance works with SUPERVISION SMSF

Wondering how life insurance works at SUPERVISION SMSF? When you become our client, your SMSF is permitted to arrange Insurance for its Members.

To simplify the Insurance Process and stop you wondering how life insurance works, SUPERVISION SMSF has established a direct arrangement with AIA Insurance (a product administered by Australian Group Insurances Pty Ltd “AGI”) allowing clients to easily apply for Insurance conveniently online.

How life insurance works with Supervision: Your insurance options

How does life insurance work at Supervision? Your SMSF is permitted to arrange the following Insurance Policies for its Members:

  1. Life Insurance
  2. Total & Permanent Disability Insurance (TPD)
  3. Income Protection Insurance

Each is discussed in detail here.  Importantly when you establish a SMSF with SUPERVISION SMSF, implementing Insurance through your SMSF is completely optional. You are under no obligation to have Insurance in your SMSF if you choose not to.

How life insurance works with Supervision: How much is life insurance?

Insurance through your SMSF can be a relatively cheap form of insurance.  The annual premiums payable depend on the amount of cover required, your age, health and lifestyle.  For an indication of the likely Insurance Premiums for the Insurance selected, visit the Insurance Quote section of our website here. It will answer questions such as “how much is life insurance in Australia?”

How life insurance works with Supervision: Recommended Levels of Cover

If uncertain about what level of Insurance Cover you actually need and how much life insurance is, the AIA Online Insurance Platform provided to SUPERVISION SMSF clients provides you with a calculator to determine how much insurance cover you require based on your unique circumstances.  This calculator provides you with valuable information when making the important decision of “How much will be enough to protect my family” if you get sick, injured or die. Importantly you are free to accept or reject the online recommendation. To determine the recommended level of cover for you and to figure out how much life insurance is, click here.

How life insurance works with Supervision: Simple Online quote and application

Many people expect a complicated answer when they ask how life insurance works with Supervision, but the insurance quotation and application process could not be easier! You simply need to visit the AIA Online Insurance Application here, answer the questions, and the system will instantly provide you with an Insurance Quote.  In most cases if you accept the Insurance Quote provided you will be instantly covered.  No medicals will be required.  It is quick and easy and makes the Insurance Application process a pleasure.  In some cases depending on your personal circumstances you may need to provide more information or undertake a medical examination.  The Online Insurance Application will automatically advise you if this is the case and a representative of AIA will contact you to finalise the Insurance Application process.  For more on the Insurance Application Process and how life insurance works with Supervision, click here.

How life insurance works with Supervision: Premiums paid from the Transaction Bank Account

Once the Insurance Policy has been setup the premiums will be paid from the Transaction Bank Account.  This allows SUPERVISION SMSF to track the premiums being made and ensure that they are claimed in your SMSF Annual Tax Return. Many people may not be aware of how much life insurance is used in Australia. It is true that Australian’s are under insured in comparison with people in other developed countries. To reduce this problem it is possible to use your Super money to make the premium payments.

How life insurance works with Supervision: Medicals

Depending on the amount of insurance cover required, your age and current health, you may be required to undertake a medical examination when you apply for Insurance through your SMSF as detailed above.  The major benefit in the Insurance Offering provided by AIA however is that in many cases there is absolutely no need for medicals, simplifying the Insurance Process.  In fact in many cases you can have your Insurance Coverage implemented in under 30 minutes with no complicated paper forms and medicals, so if you’re wondering how much life insurance is going to cost in terms of time, the answer is not a lot!

How life insurance works with Supervision: Avoid Audit Issues

In order for the SMSF to pay for Insurance Premiums, the Insurance Policy must be in the SMSF name with a specified Member named as the Insured person.  By arranging our clients Insurance using the AIA Online Insurance Platform, you can be assured that the Insurance Policy will be established correctly.  This ensures ATO compliance issues and associated penalties are eliminated and that client Insurance Policies are compliant with Super Regulations.

How life insurance works with Supervision: Cannot transfer from Individual Name

Where you already have an Insurance Policy in your personal name you must ensure that the SMSF does not pay for the Insurance Premiums.  Most clients attempt to resolve this issue by transferring the Individual Policy to their SMSF.  This is illegal and you must ensure this is not done.  If you have an Individual Insurance Policy and want this transferred to a SMSF you must cancel the existing policy and arrange for a new policy in the name of the SMSF to be implemented.  This can be done through the AIA Online Insurance Application here.

How life insurance works with Supervision: Accessing Information by SUPERVISION SMSF

Data for all SMSF Insurance Policies established directly through SUPERVISION SMSF are electronically accessible by SUPERVISION SMSF alleviating you of the responsibility of maintaining these records at financial year end.

How life insurance works with Supervision: AIA Product Disclosure Statement

The AIA Product Disclosure Statement should be carefully reviewed prior to applying for Insurance using the AIA Insurance Product.  The relevant Product Disclosure Statement can be found here.

How life insurance works with Supervision: No Advice

The SUPERVISION SMSF Insurance Service is provided on No Advice Basis.  Clients will need to determine if the AIA Insurance Product is appropriate for their financial situation based on their particular needs.

How life insurance works with Supervision: Insurance Service Not Compulsory

The SUPERVISION SMSF AIA Insurance Product is provided to simplify the Insurance Application Process, so it is easy apply. It is important that as trustees of your SMSF, you understand how life insurance works, not just in terms of the application but also what happens in the case of a claim. Whilst it is strongly preferred that the AIA Insurance Product is used to simplify the annual compliance process, it is not compulsory and clients can implement Insurance with any Insurer they choose if preferred. It is compulsory for the members and trustees of the SMSF to consider insurance as part of their investment strategy.

Need Help with SMSF Insurance?

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