Find and compare total and permanent disability cover super funds

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6.14%

$78

MTAA Super

$443

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MySuper Platinum
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5.40%

$92

smartMonday

$622

Advisory services
Death insurance
Income protection
Online access
Term deposits
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MyChoice Platinum
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4.87%

$78

MLC

$913

Advisory services
Death insurance
Income protection
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Variety of options
MyChoice Platinum
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5.69%

$68

Legalsuper

$628

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MySuper Platinum
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6.78%

$73

WA Super

$513

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

$575

BT Financial Group

$1.2k

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

$180

IOOF

$1.1k

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
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3.66%

$91

AMP Bank

$701

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

$0

HUB24 Limited

$452

Advisory services
Death insurance
Income protection
Online access
Term deposits
Variety of options
MyChoice Gold
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4.07%

$39

Energy Industries Superannuation Scheme

$554

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

$78

Russell Investments

$203

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

$117

First Super

$597

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

$0

OnePath

$365

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

Learn more about superannuation

Everyone needs a back-up plan – especially when it comes to something as important as your financial security.

One way to secure that back-up, for you and your family, is by having total and permanent disability insurance cover.

You may have heard of TPD cover from your superannuation fund, as most funds in Australia offer TPD cover alongside life insurance and income protection. But what, exactly, does TPD cover? And what are the benefits of holding TPD insurance in your super fund? Here’s a quick guide to help you out.

What is TPD insurance?

TPD insurance provides you with a lump sum payment if you cannot work again due to becoming totally and permanently disabled.

You can take out TPD insurance with your super fund, or with an insurance provider. Each fund or insurance company has a slightly different definition of ‘total and permanent disability’, so it is a good idea to check how your policy defines disability, as this will affect what you are covered for.

All policies offer one of two types of TPD cover:

  • Any occupation – Cover for when you can’t work again in any occupation – that is, if you can’t return to any job you are suited to based on your training, education or experience
  • Own occupation – Cover for when you can’t work again in your own occupation – that is, if you can’t return to the job you had at the time of injury or illness. It is generally easier to satisfy the conditions for an ‘own occupation’ payout, so this type of TPD usually has a higher premium than an ‘any occupation’ policy.

Due to government legislation passed in 2014, super funds can’t offer ‘own occupation’ TPD cover to its members. So if you would like this type of insurance, you may need to consider other options or speak to a financial adviser.

How much TPD cover do I need?

There is no magic figure, as how much TPD cover you may need depends on your individual circumstances, financial situation, what government benefits or workers’ compensation you might be eligible for, and your family’s needs.

Keep in mind, though, that TPD cover is separate to an income protection policy, which gives you regular payments as a source of income if you are unable to work. TPD is a one-off payment which can be used to cover expenses such as:

  • Rehabilitation and other therapies
  • Hospital and medical bills
  • Employing a carer
  • Modifying your home or car due to disability
  • Clearing outstanding debts (for example, paying down your mortgage)
  • Topping up your income protection policy payments

What are the pros and cons of having TPD cover with your super fund?

Many superannuation funds offer TPD insurance to their members, usually bundled together with life insurance and income protection. Some funds give it to you by default once you become a member.

There are advantages and disadvantages to holding TPD insurance with your super fund instead of an insurance. The pros are:

  • Tax-effective premiums – When you purchase insurance through your super fund, your premiums are deducted from your pre-tax superannuation contributions. This is not only tax-effective, but saves you from needing to stretch your household budget to pay for cover. If you don’t want to eat into your super balance, you can also salary-sacrifice towards your TPD insurance premium.
  • Competitively priced policies – Super funds often negotiate group discounts by purchasing policies in bulk, which means they can offer TPD insurance at a competitive price
  • Easy to maintain – Premiums are deducted automatically from your superannuation contributions, which can make payments easier to manage

The cons of getting total and permanent disability cover with your super fund are:

  • Your fund may not offer the level of cover you need – In many cases, the level of cover offered by your super fund is lower than what you can purchase from insurance providers. Your choices may also be limited, especially if you wish to take out ‘own occupation’ TPD cover.
  • Potential delays in receiving payment – When you receive a payout, insurers must go through your super fund first, which then distributes the money to you as a beneficiary. This means there could be a delay in your payment.
  • You TPD payout may be taxed – Depending on your age and when the disability occurs, a portion of your TPD benefit may be taxed if you purchase it within a super fund.

If you are unsure whether your super fund covers you for TPD, contact them to find out.

It’s also worth taking some time to check the terms and conditions of your policy – especially how it defines ‘total and permanent disability’, how much you are covered for and the conditions of release.

Then you will know exactly what you are covered for, and be better prepared for your family’s financial future.

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 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.

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 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 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.

Am I entitled to superannuation if I'm a casual employee?

As a casual 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