Calling on All OzBargainers - Any Suggestions/Recommendations/personal experiences?
I am aware that it's possible to get cover via a Super Fund(as i heard-fewer features and less flexibility), but I'm looking more features and importantly hassle-free.
Would like to hear from all the experienced OzBargainers to help me to find good insurance provider.
Many thanks!
Savings.
Doing it through your super fund is generally more tax effective (so it costs you less), but some funds are better than others.
IMO the most important feature to look out for is wait time - you don't want a policy that'll make you wait 90 days before you can start receiving a payout.
Shop around, check what your super fund offers, and compare. Most policies are quite similar.
Actually this is not true.
Income protection policies are 100% tax deductible regardless of in super or not.
It is generally cheaper to have your life/TPD/Accident insurance through your super as it is only taxed at 15% and is not tax deductible outside of super.
I would recommend a policy outside of super as you get more features and options tailored to your needs than the generic ones pushed out by the superfunds. Also most IP policies in super only pay out for 2 years not until you are 65 yo.
@danukachathu
Be careful, there is incorrect information here.
You should seek Financial Advice as everyone's circumstances are different.
Occupation, health etc etc can all affect the policy.
I am a Financial Planner and as a planner I am required to provide advice which is in the client's best interest. Feel free to PM me or alternatively contact someone who can access any insurer to ensure you have the best advice possible.
Items I have been told to consider:
I have 2yr income protection for me, none for my spouse. It is paid via Super. It covers 80% of my salary and has a waiting period of 30 days.
My reasoning is 2 years give us a grace period to deal with any illness/injury/disability in order to either get back on our feet or adapt our lives to the new reality. Note I otherwise only insure for catastrophe, I don't think it wise to insure against every little set back.
I would suggest you should exhaust all options to pay via super first, as it is then paid with before tax dollars, giving you the equivalent to a discount of your marginal tax rate, likely to be 30% or more. The idea that a product paid via super versus paid via after tax dollars need to differ is nonsensical, an idea that obviously benefits sellers of such policies outside super! But your fund might have restrictions on which policies are available - you will need to check.
You can claim all your tax back even if your policy is outside of super. The only advantage is that it will not affect your cashflow as much.
https://www.ato.gov.au/Individuals/Income-and-deductions/Ded…
If you can pay premiums using your cash flow, it's better to hold your IP outside super. Holding it inside super means you need to meet not just the insurer's definition but also SIS Act Super conditions of release, which is very strict.
Make sure you choose a waiting period that is suitable for your situation and the longest benefit period possible. Also, if you have the cashflow, an agreed value contract means less hassle for you during claims time.
Super fund life/income insurance is usually better as its paid with before tax dollars.
If you have super with one of the industry funds or big superfunds like Mercer/Westpac/Commbank/Govt Fund/etc, you are automatically covered for income protection (for temporary/permanent total or partial disability). But still ask for the PDS to see if the cover is adequate.
I previously used income protection through my superannuation. It was pretty straightforward and basic. Had to see a independent medical examiner to verify my injury and capacity for work. Superfund paid for that.