cons of IP, death & TPD in super

[s0805]

Hello there,

wondering what the are cons of having IP, TPD & Death within super. Below are something i've found by reading some of old forums here, pls add/advise...

For IP

General understanding is that within super most policy is for max 2 yrs only (super I am with have max benefit until 65 yrs age, also with own occupation)
Got mentioned that IP within super is not flexible then outside, don't understand this

For TPD & Death

Can't find any cons of having this in super, from the forums I've read seems most of them have this within super....may be it has to do with amount of higher cover like 1mil...is it?

Premium costs in super - what it will do to super balance over the years (this can be overcome by doing the salary sacrifice every year same as premium amount)

IP, death & TPD doesn't need to meet 'condition of release' ( or does it?) if within super....i mean as long as insurance company processes the claim..super should provide money for these insurances to beneficiary...

Having insurances through super is so cheap (stepped or levelled)...wonder why would so many consider this outside super...

I haven't seen trauma being offered by any super yet.....

cheers

 

[devank]

TPD- are you allowed to access before 65?
Death - Again, are there any age issue? any complications in money transfer from insurance company to super to your partner or kids?

 

[HotRod]

I haven't seen trauma being offered by any super yet.....

Can't do AFAIK.

 

[Rolf Latham]

you are eating your super

the biggest con is that yes its cheaper than outside fora number of reasons, but for youngish peops, the compound loss can be very large.

And yes I understand that this is MEANT to be better than outside, thence you take the cash you save from Outside and invest that.'

May happen with most peops here, but not in the real world

ta
rolf

 

[s0805]

TPD- are you allowed to access before 65?
Death - Again, are there any age issue? any complications in money transfer from insurance company to super to your partner or kids?

Super I m with have confirmed that dealth & TPD doesn't have to meet 'condition of release' However i will check what is the process of getting
death benefit paid for my spouse/kids....good point.

you are eating your super

the biggest con is that yes its cheaper than outside fora number of reasons, but for youngish peops, the compound loss can be very large.

And yes I understand that this is MEANT to be better than outside, thence you take the cash you save from Outside and invest that.'

May happen with most peops here, but not in the real world

ta
rolf

Rolf, i agree that compound loss can be large....i think the way to overcome is that salary sacrifise that (expected yearly premium) every year...so it doesn't chew up super over the years....

 

[HotRod]

Super I m with have confirmed that dealth & TPD doesn't have to meet 'condition of release' However i will check what is the process of getting
death benefit paid for my spouse/kids....good point.




Rolf, i agree that compound loss can be large....i think the way to overcome is that salary sacrifise that (expected yearly premium) every year...so it doesn't chew up super over the years....

That's the trick.

You put Life/TPD into super and you salary sacrifice the same amount of the premium into super. Still paying for it, just in before tax dollars and thus cheaper.

Works better if the super balances are large and earnings in super far exceed the insurance premiums.

If you are starting out, the insurance premiums will just eat away at earnings and contributions (although at younger ages the premiums are much lower so that kind of balances out the lower super fund values)

 

[Terry_w]

Carefully consider the wording on your policy.
See recent case Galaxy Homes Pty Ltd V The National Mutual Life Association Of Australasia Ltd [2013] SASCFC 34.

The there was a dispute over the clause in the policy:
"will result in the death of the person insured within 12 months, regardless of any treatment that might be undertaken".

The insured had a medical condition which could result in death within 12 months, but it was not certain that it would result in death. If it the word "will likely" was used instead of just "will" he would have got a payout.

 

[s0805]

That's the trick.

You put Life/TPD into super and you salary sacrifice the same amount of the premium into super. Still paying for it, just in before tax dollars and thus cheaper.

Hotrod, Not only death/TPD, i think IP with the same stratergy should be given a good thought as well....

Carefully consider the wording on your policy.

Thanks Terry....planning to read PDS over the weekend,,,what fun

Are you guys aware of any good websites that can give me comparison of these insurances outside super.....

cheers