Death Cover through Super for under 30's

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  ihbh on 24/10/2020 - 12:54

  +3

  For someone with no dependents (I'm assuming none overseas too), you do not need death cover. It's a waste.

  Use the premium savings to add to your super investments so that you have more to retire on.

  When you do have dependents - wife, kids, etc., then depending on the size of your asset base, you might or might not need it. If you have substantial assets then you don't need it (it's called self insurance), otherwise it's prudent to have death cover, which is generally cheapest through your super fund.

  Note that this is only general advice as I don't know of your specific circumstances nor am I licensed to give financial advice.

  • 

    carmen727 on 24/10/2020 - 13:13

    That is exactly what I am thinking. My situation is very standard, no kids anywhere, no assets, no partner, just me and my office job. I would rather put that money into my super than into an insurance premium.

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  stratbargain on 24/10/2020 - 13:05

  I guess just check as well what the penalty (or if you can) reapply for it down the track when you may need it (dependents, family etc)

  I believe some insurance companies make it very hard to apply the older you get (and the premiums may increase)

  Not saying you shouldn't cancel it, but worth considering

  • 

    carmen727 on 24/10/2020 - 13:14

    Good point, I will do a bit of research on it.

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  avoidfullprice on 24/10/2020 - 13:36

  what would be the impact of cancelling that part of my insurance cover.

  If you want to take the cover again, they will ask you do fill in health questionnaire, and there might be exclusion of what they do payout if you die. Good news is you won't be alive to deal with The paperwork

  lenders only worry about "Income Protection " and TPD insurance, not death cover. Is that correct?

  With some insurers, normally you can take out TPD if you take out Death cover.

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  brendanm on 24/10/2020 - 13:43

  +1

  If you have no dependants, who would the death cover benefit? Seems pretty silly.

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  bobbified on 24/10/2020 - 14:01

  Within Super, insurers don't tend to offer TPD Cover alone. Usually it's either Death only or Death and TPD Cover. So something to keep in mind if you want to either take up or keep TPD Cover.

  Death Cover may not be as useful if you have no dependants, but TPD Cover can come in handy if you have some sort of accident and you become a paraplegic or quadraplagic, especially if you need lots of care.

  The only thing to think about is the fact that you may need to go through underwriting later if you decide you want it again. Superannuation "stapling" is something new too - I'm not sure if the law has been passed yet, but that may impact the way insurance works and your decisions around it later.

  PS - I don't have any dependants under the usual definition, but I do have family and friends. I have a high amount of cover and I think that some of my struggling friends can do with a little bit of help when I'm no longer around.

  • 

    ihbh on 24/10/2020 - 14:34

    +1

    but I do have family and friends… I think that some of my struggling friends can do with a little bit of help when I'm no longer around.

    I hope you've specified it in you will; otherwise it's just wishful thinking.

    • 

      OZB Al on 25/10/2020 - 10:58

      More importantly you need to nominate your superannuation beneficiaries with a binding nomination. Super does not normally go to your estate and your super provider is highly unlikely to give anything to your friends.

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  brad1-8tsi on 24/10/2020 - 14:09

  -2

  You need enough cover to pay out any money owed and your funeral. If you have that covered it's all good.

  Also, do your will and make a binding death nomination on your super otherwise you will make an administrative nightmare for your family if you die

  • 

    brendanm on 24/10/2020 - 14:35

    +2

    Why would you need to cover money owed? Unless it's a joint debt, they can't chase a dead person for money.

    • 

      brad1-8tsi on 27/10/2020 - 22:06

      Ethics and morals I guess. Having been an executor of an estate, it's complicated enough without having to deal with a debt that can't be paid.

      On a personal note, I'd rather not be buried in a paupers grave / get burned as a pauper

      • 

        brendanm on 27/10/2020 - 22:49

        No one had to deal with the debt, op has no dependents. Their family can bury them any way they like, their car loan not being paid out doesn't mean anything for the family.

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  blueyez on 26/10/2020 - 00:34

  Keep in mind most death cover policies also include what's called a Terminal Illness Benefit - potential access to the lump sum (or part thereof) if you were to be diagnosed with a terminal illness.

  If you cancel a default level of cover (which normally has no exclusions) but later want to re add it, note you'll need to submit an application to the insurer. They might add exclusions or loadings to your policy.

  Still up to you which insurance/s you'd like to have. Most super funds offer free general advice, maybe have a chat to them to make an informed decision.