The Australian government has set minimum standards for contributions for employees as well as for the management of superannuation funds. It is compulsory for employers to make superannuation contributions for their employees on top of the employees' wages and salaries.
Most super funds offer insurance to their members. Life, Total Permanent Disability (TPD) and Disability Income Protection (IP) policies can be held inside of Super.
The benefit of doing this is it allows for Insurance cover to be obtained without affecting your day to day cash flow. Premiums’ are deducted from your Super account allowing you the peace of mind knowing you’re covered in the unfortunate event that something happens to you or your family, without having to worry about managing the payments.
It is important to note that these premiums will reduce the amount you have in super so it is important to speak to an financial advisor to ensure your insurance is tailor-made to suit your individual situation, and that your super fund is performing so these premiums have a minimal effect. Trauma is not usually held in super so that in the event of needing to make a claim, the benefit can be paid directly to the policy holder without having to meet a ‘condition of release’ required by most superfunds.
