Term Life Insurance and Superannuation

Term Life Insurance and Superannuation. Nominating your beneficiaries for term life insurance inside super. When you own term life cover inside superannuation, it means that the policy is owned by a super fund trustee. So, sometimes your life insurance benefit payments may not be received by the people you intended.

Upon a successful claim, your insurer will pay the term life benefits to your super fund trustee, which form as part of the balance on your superannuation in the event of your death. It is important to understand that when no nomination is in place, the trustee has full discretion to decide who will get the benefit payment, which may go to completely different people or entities.

In order for your term life insurance proceeds to go to your intended beneficiaries, it is important to formally document who they are. Consider a binding nomination agreement under the Superannuation Industry (Supervision) Act 1993 (SIS). This can ensure that your nominated beneficiaries will receive your superannuation benefit, including your term life insurance proceeds, provided that it is valid at the time of death.

You can lodge a binding death benefit nomination with all super funds, in which you will be required to complete a form and a small fee may be charged on your super on a yearly basis.

Superannuation Rollover: The alternative to term life insurance within super.

If you are looking for more comprehensive term life cover and you still prefer to fund your insurance premiums with the balance in your superannuation, consider a life insurance superannuation rollover.

With a superannuation rollover, you get to move the funds in your existing complying super fund across to a different superannuation fund that is owned by your nominated insurance provider. Once the funds have been transferred, you can use the balance to pay for your term life insurance premiums, in which the policy is provider by the insurance provider.

One of the benefits of superannuation rollover is its provision of access to a wider variety of features and benefits with your term life insurance policy, while still allowing you to keep on top of the premiums through your super. Source: finder.com.au

Komentar

Postingan populer dari blog ini

Life Insurance Or Funeral Insurance

How Does Trauma Insurance Work

Tax Treatment Of Trauma Insurance