Using your super for insurance

AMP has shared with us this video that will talk you through using your super for insurance. You can watch the video here or read the transcription below.

I’m Nerida. I’ve been in the industry for 11 years now, and in my experience I think probably one thing to realize is how quickly life can change; how a visit to the doctor can suddenly change everything in an instant. Even though you might not want to think about it, it is important to consider your insurance needs and whether you’re adequately protected.

The trigger for me was when I got married. At that point we had a friend diagnosed with breast cancer, a lady the same age as me. That was a really big wake up call to me because it was someone my age. My husband and I got married, we bought our first home, and it was all about asking what would we do if it happened to us. Most employees these days will have a superannuation account that also has insurance inside super. AMP offers the same thing. One thing to look at is whether or not your super fund offers death, total and permanent disablement cover, and temporary salary continuance cover.

What we considered for us was firstly death insurance. Death insurance will pay a lump sum in the event that the person who is insured happens to pass away. Then there’s total and permanent disablement insurance, which is usually referred to as TPD insurance. Now that is an insurance that will pay out a lump sum in the event that you were so sick or injured that you will never be able to work again. That one covers both my husband and myself in the event that anything would happen to us health-wise and we were never able to work again.

Inside super, income protection is referred to as temporary salary continuance cover, or TSC. If you’re looking at your TSC cover, one thing to be really mindful of is the benefit payment period that you might be covered for. Standard benefits tend to be for two years or an age 65 benefit period. A two year benefit period will pay you for up to two years from the date that you were unable to work, whereas an age 65 benefit period will pay you month by month for as long as you are disabled up to age 65. A huge advantage of being able to keep your insurance inside super is that I don’t have to pay for it month by month out of my own pocket. It actually comes off my super balance, so for me I have more cash flow to spend on other things.

Then trauma insurance is a little bit different. It is simply about being paid a lump sum benefit because a certain medical condition has occurred. Now, the most common condition covered under trauma is cancer. Certainly there are significant health implication and costs from a diagnosis like that. It might be quite a bit of time out of work, a lot of medical costs, ongoing care that needs to happen, even though one day you may return to work after that diagnosis.

That’s what trauma insurance will cover. It’s also a little bit different to the TPD insurance. Trauma insurance is not available through super, so in my circumstances I have insurance through my super fund for death, TPD, and TSC, and we hold a separate trauma policy that is outside super. If you don’t know what insurance you have, make sure you have a look at the annual statement you receive from your super fund. That will normally outline the contributions, how much your superannuation balance is, and also provide you with information about what types of insurance you have and how much you’re covered for.

If you want to do your own homework, have a look at the tools available on and you’ll be able to find an insurance needs calculator there which will provide a bit of guidance about how much insurance you might need to consider. Before you make any insurance decisions, I think it’s important you do your own research about the terms and conditions that will apply to your policy, like how much is it going to cost you and what are the features and exclusion that will apply. If you want, you can then talk to a financial planner who can consider your personal circumstances.

It is really important to understand what you are covered for and what the right cover is for your personal circumstances. From my experience, I know things do go wrong, and I feel really strongly about helping our customers make sure that they all have adequate protection.

If you have any questions about insurance or would like to review your personal financial plan, please contact us for an initial consultation.