18 Apr Personal Insurance in Super – Its your choice?
Did you know that tailored personal insurance super structuring can give you a greater choice and affordability of your life Insurance and Income Protection?
If you have known about this before yet have doubts about the possible benefits, then now is the time you consider it seriously.
In the past, you only had the choice of providing personal life insurance products available inside super or establish a stand alone cover outside of super. Either of these drove up costs. You now have an option with Zurich Life Insurance to tailor a policy for your individual needs.
With this new option, creating an optimal mix of protection is a lot easier since you gain more flexibility to structure your insurance both inside and outside super. But this area of term life insurance is complex so make sure you get advice from a certified financial planner.
So, what type of tailored super structuring should be considered? There are actually two main options for you:
- own occupation TPD and
- income protection.
Own Occupation TPD
When one takes TPD own occupation inside super, chances are the narrower super definition of permanent incapacity will not be met in the event of a claim because the definition of “permanent incapacity” under superannuation laws leans more towards the any occupation definition of TPD. This won’t be the case, however, with tailored super structuring. Here, the clients have the flexibility to customize their TPD cover—an “own occupation” benefit taken outside super and an “any occupation” benefit component inside super. The result: an overall equivalent cover of “own occupation” TPD.
When clients consider taking out agreed value income protection inside super, it’s most likely that the claim may exceed the allowed benefit payment under the definition of “temporary incapacity” since this is closely aligned with the “indemnity” policy. They won’t be able to get this value then until they satisfy a condition of release. Again, this won’t be the case with tailored super structuring. Here, the income benefit is divided across two policies: “indemnity” income benefit cover under the policy held inside super and “agreed value” income benefit cover under the policy outside super. The result: an overall equivalent cover of “agreed value” income benefits.
To know more about tailored Life and Income protection insurance super structuring, feel free to contact one of our financial advisers.