Life Insurance and Your Self-Managed Super Fund

Written by Supervision Group

Supervision Group has a highly experienced team of professionals with one goal, to improve how you interact with your Business, Super, Personal Finances and Investments to grow your wealth. We know what it takes to grow and thrive in today’s fast-paced economy.

23 August 2023

Written by Anthony Dermer – Halcyon Insurance Partners

Life insurances, encompassing Death cover, Total Permanent Disablement cover, Trauma, and Income Protection insurance, are essential in protecting your wealth against death and disablement. Most Australians are, however, underinsured which puts themselves and their family at risk of significant financial loss if the unexpected were to occur.

Many SMSF trustees are not aware that they can take out most of the life insurances they need through their SMSF. This is possible because death or disablement, whether permanent or temporary, is considered a ‘condition of release’ which, once met, allows the insurance payout to be released to the life insured.

While it is essential to consider the pros and cons of any type of insurance ownership structure, one of the advantages of having insurance on your life owned by your SMSF is that the premiums are paid from your fund, rather than your cash flow.

It is vital to have all the necessary information at your disposal when considering the:

  1. type of insurance,
  2. the level of insurance,
  3. the features of the insurance and
  4. and the ownership structure of the insurance.

Your financial adviser is best placed to help you with your insurance needs.  If you don’t currently have a financial adviser to discuss your options, please contact the Supervision team and we will be able to work with you on a suitable solution for you.

There are two ways you can deal with insurance;

  1. You can receive personal financial advice which requires an analysis of your financial situation. It also provides an adviser that can work through any claims with you.
  2. You can receive general advice which will lay out your options and give you the ability to choose your insurance requirements. This is a process-driven service that helps you select the right insurance for your requirements.

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