Think twice about life cover through super

February 22, 2016
Rebecca Crommelin

There are a lot of positives about having life cover through super. It doesn't  affect your day-to-day cash-flow as it is being deducted from your super balance and there are some tax minimisation advantages. Some funds even offer 'group' or wholesale rates which usually helps make premiums more affordable. 

However, life insurance is one area where savings shouldn't be the key driver. What matters is that you have the level of protection appropriate for your needs. And on this score, many super funds fall short. 

You could be under-insured

According to research group Canstar, default life cover arranged through super funds may typically only be worth $100,000 or $200,000. In today's world of high living costs, that sort of payout is unlikely to come close to meeting your family's needs. 

Worryingly industry figures suggest that as many as one in two Australians may be underinsured by $100,000 or more. 

Our Financial Adviser, Brad Cochrane, can help determine what impact the funding of premiums from super will have on your long term goals for income in retirement, so we can put appropriate strategies in place to minimise the impact. Give Brad a call today on (08) 9485 0090.


Your fund could decide who receives the payout

Be aware too, unless you have a current binding nomination in place with your super fund, your life insurance payout may not go to the people you want it to. It can be left to the fund trustee to determine the beneficiaries of your life insurance. 

Okay, it's always better to have some life insurance than none at all but it is important to be sure your family and other dependants are protected. 

Topping up your life cover with an independent (non-super) policy can be surprisingly affordable. And it may mean the difference between your family struggling financially - and being able to rebuild their lives free from financial stress. 

As a starting point, take a look at the checklist below. If you're unsure about any of the answers, I recommend contacting our in-house Financial Adviser to review your level of cover. 


  • How much life cover do you have through your superfund?
  • Would the payout cover your debts and help your family rebuild their lives?
  • Do you have a current binding nomination?

Make your financial future secure today for you and your loved ones.

Give us a call at Mortgage Choice in Perth on (08) 9485 0090 to chat to our expert Financial Adviser, Brad Cochrane, for advice on your life insurance cover and superannuation. 


Rebecca Wilson, Loans Consultant

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