Nobody plans to have a serious accident or illness. But if it happens, you may be able to make an insurance claim through the insurance in your super.
Here is a summary of the main types of insurance cover available in super, why it can be worth having and what you should do to make sure it’s working for you.
The types of insurance cover typically offered by super funds
- Death cover – Pays a benefit to your dependants, estate or legal beneficiaries in a lump sum if you die or become terminally ill.
- Total and permanent disability cover – Pays a benefit in a lump sum if you’re unable to ever work again due to an injury or illness.
- Income protection – Pays a replacement income, usually a monthly benefit of up to 75 per cent of your regular income if you’re temporarily unable to work due to illness or injury for a specified period of time. You can generally only claim on one IP policy so you should check if you have other IP cover elsewhere.
Why insurance can be worth having
There’s little doubt insurance can help ease the strain when life’s turned upside down. Even if you’re in great health now, your situation can change suddenly. An accident or illness could put you out of action temporarily or permanently – or cause your untimely death, leaving you at risk when you need it the most and your loved ones to pick up the pieces. So, no matter what stage of life you’ve reached, there can be significant advantages to having insurance in place.
The benefits of insurance in your super
- Automatic coverage – If the insurance in your fund offers “automatic acceptance”, and you’re eligible for this type of cover, this will save you the hassle of applying and filling out a personal health statement provided you’re at work or able to work the day that your insurance commences.
- Zero impact on your weekly budget – Because the premiums are deducted from your super account, you won’t have to budget for the cover you need. If you’re managing other big life goals, such as saving for a house or paying down a mortgage, this strategy could help alleviate the demands on your finances, while still providing peace of mind. But keep in mind that since the premiums are being deducted from your super balance, this will reduce the amount of your super balance over time.
- Potential tax benefits – If you don’t want your premiums to affect your super balance, you may be eligible to salary sacrifice the cost of the premiums to your super and in turn reduce your taxable income. You should get tax advice for your personal circumstances.
Find out if you’re covered
The government has made changes to insurance provided for super members, which apply from 1 July 2019. We’ll be updating you about the changes, but in the meantime, now’s a good time for you to find out if you have insurance in your super. You can do this by logging into your mlc.com.au account, through the MLC app or checking your 2018 statement or your welcome kit letter.
Visit mlc.com.au/superinsurance to learn more about insurance in super.