Default Superannuation Insurance
- Apr 8
- 2 min read
"We have insurance in our super" is one of the most common yet potentially dangerous misconceptions we hear from clients.
Whilst yes, people technically do have default insurances in their super, as the table above illustrates for the four biggest super funds in Australia, most people are dangerously underinsured for what they actually need.
For many people, the amount of default Life and TPD insurance they receive is equivalent to only a yearly salary and a large portion of super funds offer no income protection insurance by default.
Not only are people underinsured through their default super insurance, they are also often paying more for premiums than they need to. As the insurance is default (meaning you don't need to answer health questions to receive it), the premium rate is usually much higher than when you get a policy assessed based on your individual health.
Therefore, if you are in reasonable shape health wise, it becomes a no brainer to apply for underwritten insurance through a Financial Planner.
It's important to note, if you do apply for extra insurance through your super fund, they will ask health questions for the additional insurance coverage, just as they would for a brand new policy through a Financial Planner. Therefore, it becomes far more important to use a Financial Planner to be able to compare a wider range of insurers.
Financial Advisers can help:
Calculate the cover levels you need based on your individual circumstances.
Find the best insurer for you past on cost, quality and if you have any pre-existing health conditions.
Often save people money/tax on a like for like basis compared to the default insurance in their super.
If you need to protect you and your family you can:
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