The cost of your insurance (otherwise known as premiums) can depend on your age, gender, occupation, medical history, health factors, income and employment arrangements.
If you’re an MLC MasterKey Super Fundamentals or an MLC MasterKey Business Super member, MLC Lifestage insurance may be available to you. It’s a combination of Death and Total and Permanent Disablement (TPD) insurance—which is designed to cater to your needs through different life stages.
Generally, your insurance needs change over time.
When you’re younger your personal circumstances (such as a high mortgage and young children) might mean that you’ll need more insurance. But when you’re older, you may not need as much insurance because you’re more likely to be financially secure.
Depending on your occupation, your employer may have tailored your plan to suit your insurance needs.
This can include Death and Total and Permanent Disablement (TPD) insurance, and Income Protection insurance.
If your employer has tailored your insurance cover for your plan, this will be outlined in Your Insurance Summary.
Your adviser can help you with your insurance cover needs.
Here’s a question that our members have asked about the cost of their insurance:
It’s important to find a balance between super savings and the level of your insurance cover. This is because the more insurance premiums you pay, the less monies going into your retirement savings.
The type and amount of insurance cover that’s right for you depends on your personal, family and financial circumstances, as well as your income and lifestyle. It’s also important to consider that other factors such as age will cause your premiums to increase over time.
As your circumstances change, you may need more, or less, cover – that’s why a regular review is so important.
For example, an expanding family or a reduction in personal debt may differently influence your choice in the type and amount of cover you have. It’s important that you have the insurance cover that meets your needs at a cost that doesn’t unnecessarily diminish your retirement savings.
One simple check is to calculate your annual insurance premium as a percentage of your annual gross salary. If you have an Income Protection benefit for a period of more than two years, it’s likely that the cost of your insurance is more than 1%.
If your gross annual salary is $75,000, for example, you might prefer to keep your annual insurance premiums to under $750.
It’s easy to check the percentage of your annual salary you’re paying in annual insurance premiums: (your monthly premium amount x 12) / (your gross annual salary) x 100 = percentage of premiums paid.