Find and compare super funds with life insurance

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5.69%

$68

Legalsuper

$628

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MySuper Platinum
More details
4.87%

$78

MLC

$913

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Platinum
More details
6.14%

$78

MTAA Super

$443

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Platinum
More details
5.67%

$92

smartMonday

$512

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MySuper Platinum
More details
4.57%

$0

Energy Industries Superannuation Scheme

$475

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MySuper Gold
More details
New

$0

Electricity Industry Superannuation Scheme

$365

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
New

$117

First Super

$597

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
-

$0

Goldman Sachs JBWere Superannuation Fund

$335

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MySuper Gold
More details
6.01%

$0

OnePath

$365

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
3.59%

$530

HUB24 Limited

$983

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
5.17%

$60

ING

$455

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
5.39%

$117

IOOF

$817

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details
New

$73

WA Super

$513

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MySuper Gold
More details
4.84%

$635

BT Financial Group

$1.3k

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
More details

Learn more about superannuation

Many superannuation funds offer life insurance coverage for members. If you’re considering taking out an insurance policy, it’s worth first checking to see what (if any) insurance coverage is provided by your superannuation fund.

What types of super fund insurance are there?

Although coverage differs between funds, insurance offered by super funds typically falls into three categories:

  • Death cover – Also known as ‘life insurance’, this coverage allows your beneficiaries to access a benefit when you die, either as a lump sum or ongoing payments.
  • Income protection (IP) cover – If you can’t work temporarily due to illness or disability, you’ll be paid an income for a defined period.
  • Total and permanent disability (TPD) cover – If you become disabled and will likely not be able to work again, you’ll be paid a benefit.

Keep in mind that the default super fund offered by your employer must offer a certain level of life insurance. You can find more information about your coverage by reading your fund’s product disclosure statement.

In most cases, you can also choose to alter or cancel your insurance cover if you’d prefer to take out insurance elsewhere or not have to pay fees through your super.

Pros and cons of superannuation funds life insurance

There are a number of potential pros and cons to having life insurance through your super fund.

Pros

  • Easy to manage – Premiums are automatically deducted from your super balance rather than your bank account, which can make it easier to manage your cash flow.
  • Cheaper – Typically, life insurance through superannuation funds is cheaper because the funds can negotiate a group discount on policies and pass savings on to members.
  • Flexible – You can usually choose your level of coverage.
  • No health checks required – Some super funds don’t require a medical check to be eligible for insurance.

Cons

  • Limited cover – Depending on your fund, the available level of coverage may not be sufficient for your requirements.
  • Beneficiaries aren’t guaranteed – Some funds don’t offer binding beneficiary nominations, meaning the fund’s trustee decides who will get your money in case of your death.
  • Premiums come out of your super – Unless you choose to salary sacrifice the cost of your premium, it will come off the top of your super balance.
  • Slower payments – Because the insurance payout goes to the super fund before it goes to you, processing time for claims can be slower. This is especially the case for death benefits because the trustee has to reach a decision as to the correct beneficiary.
  • Ends at a certain age – Coverage usually ends when you reach age 65 or 70, whereas policies outside of super may cover you for longer.

How to find out if you have life insurance through your super

If your super is with the default fund offered by your employer, then you should have at least the minimum level of life insurance coverage for your age.

However, it’s worth checking the type of insurance cover you have, what you’re covered for, and the cost of your premium. You can find these details by looking at your member statement or logging into your super account online.

Also check how your insurance premiums are calculated to make sure they’re appropriate. For example, if you’re listed as a smoker even though you don’t smoke, you may be paying more than you need to.

How to make an insurance claim through super

If you’re the one making the insurance claim, you’ll likely need to fill out a claim form through your super fund. Claim forms are usually available on a super fund’s website, or you can call and request one.

When making a claim for income protection cover or total and permanent disability cover, you’ll need to provide documentation (such as medical certificates) to support your claim.

In case of your death, your estate or beneficiaries will need to get in touch with your super fund to find out how to claim death benefits. The claim process usually requires documentation to determine the correct beneficiaries of your super money.

How to find superannuation funds with life insurance

Finding the right superannuation fund with life insurance takes some research. Although you may already have life insurance through your fund, it’s important to make sure the coverage is appropriate for your needs. Consider:

  • What type of insurance is offered – death cover, income protection cover, and/or total and permanent disability cover
  • The level of coverage
  • The cost of premiums
  • How long you’ll be covered
  • Whether you can nominate a binding beneficiary

If you’re thinking about switching funds, you can use RateCity’s superannuation comparison tool to see what insurance is offered by different super companies.

Frequently asked questions

What happens to my insurance cover if I change superannuation funds?

Some superannuation funds will allow you to transfer your insurance cover, without interruption, if you switch. However, others won’t. So it’s important you check before changing funds.

What should I know before getting an SMSF?

Four questions to ask yourself before taking out an SMSF include:

  1. Do I have enough superannuation to justify the higher set-up and running costs?
  2. Am I able to handle complicated compliance obligations?
  3. Am I willing to spend lots of time researching investment options?
  4. Do I have the skill to make big financial decisions?

It’s also worth remembering that ordinary superannuation funds usually offer discounted life insurance and disability insurance. These discounts would no longer be available if you decided to manage your own super.

What is a superannuation fund?

A superannuation fund is an institution that is legally allowed to hold and invest your superannuation. There are more than 200 different superannuation funds in Australia. They come in five different types:

  • Retail funds
  • Industry funds
  • Public sector funds
  • Corporate funds
  • Self-managed super funds

Retail funds are usually run by banks or investment companies.

Industry funds were originally designed for workers from a particular industry, but are now open to anyone.

Public sector funds were originally designed for people working for federal or state government departments. Most are still reserved for government employees.

Corporate funds are arranged by employers for their employees.

Self-managed super funds are private superannuation funds that allow people to directly invest their money.

How long after divorce can you claim superannuation?

You or your partner could be forced to surrender part of your superannuation if you divorce, just like with other assets.

You can file a claim for division of property – including superannuation – as soon as you divorce. However, the claim has to be filed within one year of the divorce.

Your superannuation could be affected even if you’re in a de facto relationship – that is, living together as a couple without being officially married.

In that case, the claim has to be filed within two years of the date of separation.

Either way, the first thing to consider is whether you’re a member of a standard, APRA-regulated superannuation fund or if you’re a member of a self-managed superannuation fund (SMSF), because different rules apply.

Standard superannuation funds

If your relationship breaks down, your superannuation savings might be divided by court order or by agreement.

The rules of the superannuation fund will dictate whether this transfer happens immediately, or in the future when the person who has to make the transfer is allowed to access the rest of their superannuation (i.e. at or near retirement).

Click here for more information.

SMSFs

If your relationship breaks down, you must continue to observe the trust deed of your SMSF.

So if you and your partner are both members of the same SMSF, neither party is allowed to use the fund to inflict ‘punishment’ – such as by excluding the other party from the decision-making process or refusing their request to roll their money into another superannuation fund.

This no-punishment rule applies even if the two parties are involved in legal proceedings.

Click here for more information.

Financial consequences

Superannuation funds often charge a fee for splitting accounts after a relationship breakdown.

Splitting superannuation can also impact the size of your total super balance and how your super is taxed.

Click here for more information.

How do you set up superannuation?

Before you set up a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).

How do you create a superannuation account?

Before you create a superannuation account, you’ll need to check if you’re allowed to choose your own fund. Most Australians can, but this option doesn’t apply to some workers who are covered by industrial agreements or who are members of defined benefits funds.

Assuming you are able to choose your own fund, the next step should be research, because there are more than 200 different superannuation funds in Australia.

Once you’ve decided on your preferred superannuation fund, head to that provider’s website, where you should be able to fill in an online application or download the appropriate forms. You’ll need your tax file number (assuming you don’t want to be charged a higher tax rate), your contact details and your employer’s details (if you’re employed).

What superannuation details do I give to my employer?

When you start a job, your employer will give you what’s called a ‘superannuation standard choice form’. Here’s what you need to complete the form:

  • The name of your preferred superannuation fund
  • The fund’s address
  • The fund’s Australian business number (ABN)
  • The fund’s superannuation product identification number (SPIN)
  • The fund’s phone number
  • A letter from the fund trustee confirming that the fund is a complying fund; or written evidence from the fund stating it will accept contributions from your new employer; or details about how your employer can make contributions to the fund

You should also provide your tax file number – while it’s not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.

How do you open a superannuation account?

Opening a superannuation account is simple. When you start a job, your employer will give you what’s called a ‘superannuation standard choice form’. Here’s what you need to complete the form:

  • The name of your preferred superannuation fund
  • The fund’s address
  • The fund’s Australian business number (ABN)
  • The fund’s superannuation product identification number (SPIN)
  • The fund’s phone number
  • A letter from the fund trustee confirming that the fund is a complying fund; or written evidence from the fund stating it will accept contributions from your new employer; or details about how your employer can make contributions to the fund

You might want to provide your tax file number as well – while it’s not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.

What compliance obligations does an SMSF have?

SMSFs must maintain comprehensive records and submit to annual audits.

How do I wind up an SMSF?

There are five things you must do if you want to close your SMSF:

  1. Fulfil any obligations listed in the trust deed
  2. Pay out or roll over all the superannuation
  3. Conduct a final audit
  4. Lodge a final annual return
  5. Close the fund’s bank account

What is an SMSF?

An SMSF is a self-managed superannuation fund. SMSFs have to follow the same rules and restrictions as ordinary superannuation funds.

SMSFs allow Australians to directly invest their superannuation, rather than let ordinary funds manage their money for them.

SMSFs are regulated by the Australian Taxation Office (ATO). They can have up to four members. All members must be trustees (or directors if there is a corporate trustee).

Unlike with ordinary funds, SMSF members are responsible for meeting compliance obligations.

What are the risks and challenges of an SMSF?

  • SMSFs have high set-up and running costs
  • They come with complicated compliance obligations
  • It takes a lot of time to research investment options
  • It can be difficult to make such big financial decisions

How do I set up an SMSF?

Setting up an SMSF takes more work than registering with an ordinary superannuation fund. 

An SMSF is a type of trust, so if you want to create an SMSF, you first have to create a trust.

To create a trust, you will need trustees, who must sign a trustee declaration. You will also need identifiable beneficiaries and assets for the fund – although these can be as little as a few dollars.

You will also need to create a trust deed, which is a document that lays out the rules of your SMSF. The trust deed must be prepared by a qualified professional and signed by all trustees.

To qualify as an Australian superannuation fund, the SMSF must meet these three criteria:

  • The fund must be established in Australia – or at least one of its assets must be located in Australia
  • The central management and control of the fund must ordinarily be in Australia
  • The fund must have active members who are Australian residents and who hold at least 50 per cent of the fund’s assets – or it must have no active members

Once your SMSF is established and all trustees have signed a trustee declaration, you have 60 days to apply for an Australian Business Number (ABN).

When completing the ABN application, you should ask for a tax file number for your fund. You should also ask for the fund to be regulated by the Australian Taxation Office – otherwise it won’t receive tax concessions.

Your next step is to open a bank account in your fund’s name. This account must be kept separated from the accounts held by the trustees and any related employers.

Your SMSF will also need an electronic service address, so it can receive contributions.

Finally, you will need to create an investment strategy, which explains how your fund will invest its money, and an exit strategy, which explains how and why it would ever close.

Please note that you can pay an adviser to set up your SMSF. You might also want to take the Self-Managed Superannuation Fund Trustee Education Program, which is a free program that has been created by CPA Australia and Chartered Accountants Australia & New Zealand.

What is an SMSF investment strategy?

All SMSFs are required to have an investment strategy, which should explain what assets the fund will buy and what objectives it will pursue. This strategy must be reviewed regularly.

Issues to consider include how much risk the SMSF will take, how easily its assets can be converted into cash and how it will pay out benefits.

What contributions can SMSFs accept?

SMSFs can accept mandated employer contributions from an employer at any time (Funds need an electronic service address to receive the contributions).

However, SMSFs can’t accept contributions from members who don’t have tax file numbers.

Also, they generally can’t accept assets as contributions from members and they generally can’t accept non-mandated contributions for members who are 75 or older.

How are SMSFs allowed to invest their funds?

SMSFs can invest in conventional assets such as shares, term deposits, managed funds and property.

SMSFs can also buy ‘collectibles’ such as artwork, jewellery, antiques, coins, stamps, vintage cars and wine – although there are special rules that apply to collectibles.

Investments must be made on an arm’s length basis, which means that assets must be bought and sold at market prices, while income must reflect the market rate of return.

As a general rule, SMSFs can’t buy assets from members or related parties.

How are SMSFs taxed?

Funds that follow the rules are taxed at the concessional rate of 15 per cent. Funds that don’t follow the rules are taxed at the highest marginal tax rate.

Can I carry on a business in an SMSF?

SMSFs are allowed to carry on a business under two conditions.

First, this must be permitted under the trust deed.

Second, the sole purpose of the business must be to earn retirement benefits.

How does superannuation affect the age pension?

Most Australians who are of retirement age can qualify for the age pension. However, depending on the size of your assets and post-retirement income, you might be entitled to only a reduced pension. In some instances, you might not be entitled to any pension payments.

How is superannuation calculated?

Superannuation is calculated at the rate of 9.5 per cent of your gross salary and wages. So if you had a salary of $50,000, your superannuation would be 9.5 per cent of that, or $4,750. This would be paid on top of your salary.

The ‘superannuation guarantee’, as it is known, has been at 9.5 per cent since the 2014-15 financial year. It is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.