The two finance terms that seem the most complicated - superannuation and insurance. Let’s unpack how these two work together.
When you think about insurance you’re probably thinking about travel insurance for a holiday in Europe, car insurance for scratching your car, or private health insurance for visiting the dentist.
But here’s the thing - if you have a superannuation account, there’s a pretty high chance that you have insurance through your super fund. But it’s often a different type of insurance.
In fact, almost 10 million accounts have super insurance, but a lot of us don’t even realise we’ve got it. Let’s walk through everything you need to know about insurance as part of your superannuation account.
Most super funds automatically provide some form of insurance to members. Basically, it’s another way for these funds to make money and it can be a pretty decent insurance option for us members, too.
Some funds sign you up automatically when you join, but you can always say ‘no thanks’ if you decide the cover they offer isn’t quite right for you.
There are a few main types of insurance that most funds offer. And it may sound a little dark, but it’s good to know. You’ve got:
You can check whether you have insurance through your super fund contacting them. Otherwise you might have noticed premiums being deducted from your super balance.
If you’re under 25 years old or you’ve got less than $6k in your account, you probably won’t have insurance. You also mightn’t have insurance if your account is ‘inactive’ - aka without contributions for 16 months.
There are quite a few differences between having insurance as part of your super membership and going with an external insurance provider. Let’s go through the pros and cons…
Pros
Cons
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