There are three types of life insurance in super:
At a glance
There are three types of life insurance cover typically offered through super:
- Death (including terminal illness) cover
- Total and permanent disability cover
- Income Protection cover.
What does life insurance cover?
Death cover or life insurance in super
Life insurance in super can help meet the costs of your mortgage, debts, funeral costs and provide dependants with a lump sum. Superannuation life insurance has many benefits and should be considered.
Total and Permanent Disability (TPD) cover in super
TPD super life insurance provides a lump sum to help cover your living expenses and rehabilitation costs if you become totally and permanently disabled. This is only available if you also take life insurance in super.
In the past you could only access a TPD superannuation life insurance if you satisfied the permanent incapacity condition of release. As of 1 July 2014, you’ll need to satisfy the same conditions of release that you’d need to satisfy, if you were claiming your super to get your superannuation life insurance. If not, the benefit will be invested into your super account until it can be paid to you.
Income Protection Insurance in super
This life insurance in super provides a monthly income of up to 75% of your salary if you suffer an illness or injury and become unable to attend to your normal duties.
Income Protection insurance held inside super may provide cover for either a two year benefit period or up to age 65.
Each of these life insurance types above can be valuable in time of need after the death, injury or illness of the insured person. Life insurance within superannuation is worth considering. It is recommended to seek professional financial advice in relation to insurance cover.