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Product

LGIAsuper - Accumulation Account (Retained Benefits)

Past 5-year return
7.08

% p.a

FYTD return

1.47

% p.a

Company
Calc fees on 50k

$485

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SuperRatings Platinum 2022 MyChoice Super
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Superannuation funds we compare at RateCity

Learn more about superannuation

Total and permanent disability (TPD) cover is a type of insurance that can provide a financial safety net if you are seriously injured or ill and unlikely to be able to work again. With TPD insurance, you’re paid a lump sum to help cover the cost of living, medical treatment, rehabilitation and debt repayments.

Certain superannuation funds offer total and permanent disability cover as part of broader life insurance coverage. With TPD cover through your super, you pay a premium just as you would any other insurance policy, but the cost is taken out of your super balance.

How to find out if you have total and permanent disability cover through your super

Many super funds offer life insurance coverage, but not all include total and disability permanent cover. If your super is with your employer’s default fund, the fund is required to offer a minimum level of life insurance, but that usually doesn’t include TPD cover.

To check insurance coverage through your super, take a look at your member statement or login to your super account online. Make sure to check the type of insurance cover you have (because it may not include total and disability cover), what you’re covered for, and the cost of your premium.

What other types of insurance are offered by super funds?

Along with TPD insurance, many superannuation funds offer the following types of insurance:

  • Death cover – This is generally called ‘life insurance’ and gives your beneficiaries a benefit if you die, either as a lump sum or ongoing payments.
  • Income protection (IP) cover – If you’re out of work temporarily due to illness or disability, you can be paid an income for a specified period.

Super funds that offer a basic level of life insurance (death cover) will usually allow you to tailor your coverage to suit your needs. So even if you don’t have TPD cover as part of your current insurance, you may be able to add it on.

Should you get total and permanent disability cover?

While income protection insurance can replace some of your income if you are temporarily unable to work due to illness or injury, it could also useful to have a lump sum of money to cover your immediate costs. That’s where TPD cover comes in.

Deciding whether to get total and permanent disability cover depends on a number of factors, including:

  • Occupation – Whether your work makes you susceptible to permanent injury or illness.
  • Current insurance – Whether other insurance offered by your super or a private health fund is sufficient.
  • Family income – What you earn as a family and whether it would be enough to live off if you had to stop working permanently.
  • Support network – How much support and assistance would be available to you if you had to stop working.
  • Flexibility – Whether you could afford to cut down on expenses or reduce debt.
  • Other benefits available to you – Whether you could access benefits through workers’ compensation or the government.

How to make a TPD claim

You can make a TPD claim if you satisfy the criteria for total and permanent disability outlined by your super fund or insurance provider.

To make a claim, you’ll need to get in touch with your provider so they can give you the necessary claim forms. You’ll also need to provide supporting documentation (such as medical reports) to prove that you’re no longer able to work.

How to find superannuation funds with total and permanent disability cover

Your occupation, age and other factors will likely dictate whether or not you decide to take out total and permanent disability cover. If you decide to purchase TPD insurance, doing so through your super fund could be the most cost-effective option. This is because super funds are able to purchase policies in bulk and pass on savings to members.

When comparing superannuation funds with total and permanent disability cover, be sure to consider:

  • The level of coverage – Calculate whether the lump sum payout would be adequate to live off if you had to stop working.
  • The definition of TPD – Different providers have different criteria for total and permanent disability. Read the product disclosure statement to see the definition.
  • Own or any occupation – Some policies allow you to claim if you can no longer work in your usual occupation, whereas others will only allow you to claim if you can no longer work in any capacity.
  • Whether you can link policies – Bundling a life insurance policy with TPD is often most cost-effective.
  • A buy-back option – You may be able to purchase a buy-back option, which allows you to reinstate the amount deducted from your benefit when you make a claim.
  • Waiting period – You may have to wait for a specified period after applying before you can make a claim.

Head to RateCity’s superannuation comparison tool to compare insurance policies offered by different super funds.

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.

How do you get superannuation?

You’re automatically entitled to superannuation if:

  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

How do you find superannuation?

Lost superannuation refers to savings in an account that you’ve forgotten about. This can happen if you’ve opened several different accounts over the years while moving from job to job.

You can use your MyGov account to see details of all your superannuation accounts, including any you might have forgotten. Alternatively, you can fill in a ‘Searching for lost super’ form and send it to the Australian Taxation Office, which will then search on your behalf.

How do you claim superannuation?

There are three different ways you can claim your superannuation:

  • Lump sum
  • Account-based pension
  • Part lump sum and part account-based pension

Two rules apply if you choose to receive an account-based pension, or income stream:

  • You must receive payments at least once per year
  • You must withdraw a minimum amount per year
    • Age 55-64 = 4%
    • Age 65-74 = 5%
    • Age 75-79 = 6%
    • Age 80-84 = 7%
    • Age 85-89 = 9%
    • Age 90-94 = 11%
    • Age 95+ = 14%

If you want to work out how long your account-based pension might last, click here to access ASIC’s account-based pension calculator.

Is superannuation paid on unused annual leave?

If your employment is terminated, superannuation will not be paid on unused annual leave.

Am I entitled to superannuation if I'm a part-time employee?

As a part-time employee, you’re entitled to superannuation if:

  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

How can I increase my superannuation?

You can increase your superannuation through a ‘salary sacrifice’. This is where your employer takes part of your pre-tax salary and pays it directly into your superannuation account. Like regular superannuation contributions, salary sacrifices are taxed at 15 per cent when they are paid into the fund.

When did superannuation start in Australia?

Australia’s modern superannuation system – in which employers make compulsory contributions to their employees – started in 1992. However, before that, there were various restricted superannuation schemes applying to certain employees in certain industries. The very first superannuation scheme was introduced in the 19th century.

Can I choose a superannuation fund or does my employer choose one for me?

Most people can choose their own superannuation fund. However, you might not have this option if you are a member of certain defined benefit funds or covered by certain industrial agreements. If you don’t choose a superannuation fund, your employer will choose one for you.

What is the difference between accumulation and defined benefit funds?

A majority of Australians are in accumulation funds. These funds grow according to the amount of money invested and the return on that money.

A minority of Australians are in defined benefit funds – many of which are now closed to new members. These funds give payouts according to specific rules, such as how long the worker has been with their employer and their final salary before they retired.

Am I entitled to superannuation if I'm a contractor?

As a contractor, you’re entitled to superannuation if:

  • The contract is mainly for your labour
  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

Please note that you’re entitled to superannuation even if you have an Australian business number (ABN).

How much extra superannuation can I add to my fund?

There is an annual limit of $25,000 for concessional contributions – that is, money paid by your employer and extra money you pay into your account through salary sacrificing. There is also a limit on non-concessional contributions. Australians aged between 65 and 74 have a limit of $100,000 per year. Australians aged under 65 have a limit of $300,000 every three years.

Who can open a superannuation account?

Superannuation accounts can be opened by Australians, permanent residents and temporary residents. You’re automatically entitled to superannuation if:

  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

What are the age pension's age rules?

Australians must be aged at least 65 years and 6 months to access the age pension. This eligibility age is scheduled to increase according to the following schedule:

Date Eligibility age
1 July 2019 66 years
1 July 2021 66 years and 6 months
1 July 2023 67 years

Is superannuation paid on overtime?

As the Australian Taxation Office explains, there are times when superannuation is paid on overtime and times when it isn’t.

Here is the ATO’s summary:

Payment type Is superannuation paid?
Overtime hours – award stipulates ordinary hours to be worked and employee works additional hours for which they are paid overtime rates No
Overtime hours – agreement prevails over award No
Agreement supplanting award removes distinction between ordinary hours and other hours Yes – all hours worked
No ordinary hours of work stipulated Yes – all hours worked
Casual employee: shift loadings Yes
Casual employee: overtime payments No
Casual employee whose hours are paid at overtime rates due to a ‘bandwidth’ clause No
Piece-rates – no ordinary hours of work stipulated Yes
Overtime component of earnings based on hourly-driving-rate method stipulated in award No

Can my employer use money from my superannuation account?

No, your employer can’t touch the money that is paid into your superannuation account.

What are reportable employer superannuation contributions?

Reportable employer superannuation contributions are special contributions that an employer makes on top of the regular compulsory contributions. One example would be contributions made as part of a salary sacrifice arrangement.

What will the superannuation fund do with my money?

Your money will be invested in an investment option of your choosing.

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.

What age can I withdraw my superannuation?

You can withdraw your superannuation (or at least some of it) when you reach ‘preservation age’. The preservation age is based on date of birth. Here are the six different categories:

Date of birth Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
From 1 July 1964 60

When you reach preservation age, you can withdraw all your superannuation if you’re retired. If you’re still working, you can begin a ‘transition to retirement’, which allows you to withdraw 10 per cent of their superannuation each financial year.

You can also withdraw all your superannuation once you reach 65 years.