Buying insurance through super

Contributing to super can allow you to buy personal insurances such as life and total and permanent disability cover through your fund.

The advantages of purchasing these insurances through super are that you can benefit from a range of up-front tax concessions that are not generally available when insuring outside of super.

For example:

• You may be able to purchase insurance with pre-tax dollars if you are an employee and are able to salary sacrifice into super.
• If you are self-employed or not employed, you can claim super contributions as a tax deduction whether you are making them to purchase insurance or not.
• If you are eligible to receive a Government co-contribution, you could use this to help you cover the cost of insurance.

These tax concessions can make it cheaper to insure through super, or enable you to purchase a higher level of cover.

You can also arrange to have your premiums deducted from your existing balance so you don’t have to make additional contributions to cover the cost of insurance.

However with this option you need to keep in mind you would be using up some of your retirement savings to do this.

To find out more about this strategy and whether it could be suitable for you, seek financial advice.