Protect It

As part of your superannuation, you have a number of insurance options that you can access in case something goes wrong. Below are the three main types of insurance that you can have with your superannuation.

First Nations Foundations is an independent company that provides an information service. The content on the website is not advice. There is no explicit or implied endorsement of any particular companies, products or strategies. The information on this site is educational and is intended as a general overview and no responsibility can be taken for any change in your personal circumstances of any persona acting on this information. You are advised to discuss your personal situation with your financial planner, accountant or other industry professional.

Life insurance

Gives your family a lump sum or regular payments if you pass away.

Total and permanent disability (TPD)

Pays you money if you become severely disabled and are unable to work again.

Income protection

Pays up to 75% of your wage while you are unable to work due to a temporary illness.

Irene Smiling Face

Aunt Viv says: We all know Sorry Business is a tough time for our mob. You should think about life insurance to help look after your family if anything happens to you. Have a chat with your super fund who can help you out with getting started. 

Life insurance

Life insurance will pay out money to whomever you nominate. The people that you select to receive the money are called beneficiaries. If you pass away but don’t have any beneficiaries, then the super company will decide where your money will go.

When deciding how much life insurance you may need, it’s a good idea to see how much money you or you family would need to pay for:

  • Rent or mortgage
  • Credit cards, personal loans or car loans
  • School fees and other ongoing expenses.

The last thing that you want to do is to leave family with all the bills to pay. So, if you add up all the debts and expenses, you can get this amount paid out so your family can use it to pay everything off.

Total and permanent disability (TPD) insurance

This is insurance that will pay you a lump sum if you acquire a permanent injury or illness and you are unable to work again. It’s designed to help pay for your medical bills and living expenses because you are unable to work.

Each superannuation company is different in what they determine to be permanent disability, so you will need to read up on the information they provide you. 

Just like life insurance, when thinking about how much you need, you should add up all the bills and expenses that will still need to be paid. Just because your income stops it doesn’t mean that your bills stop, so you want to make sure that you have enough money to cover costs. 

Income protection insurance

Income protection insurance will pay you part of your income while you are unable to work due to a partial or total disability. You can have up to 75% of your wage paid to you by the insurance company even though you are no longer working. Below are two things that are really important when looking at income protection insurance.

Waiting period

This refers to how long you have to wait until you start getting paid. If you have a 60-day waiting period, that means that you have to wait 60 days for the insurance company to start paying you. That's two months without pay.

You can make it less, but the the shorter the waiting period, the more expensive it will be.

Payment

This is made up of two parts: how much you will get paid, and for how long. You can elect to get paid 75% of what your income was when working.

You can also choose how long you want to get paid for. It could be a few years or to a specific age. The more you get paid and the longer you get paid, the more expensive it will be.

How can I afford to pay insurance?

Because your insurance is in your super account, the cost of the insurance will also come from your super account. This means that you don’t have to pay anything extra out of your regular pay. 

Having insurance in your super can be cost effective because it’s not another bill to pay each month, but it can sometimes be cheaper to have your insurance outside of your superannuation. 

Scroll to Top