ottg Posted August 26, 2016 Report Share Posted August 26, 2016 Would like to know from those forum members who has their Aus life insurance separate from their Super: a. Who did you select and why b. Who are the underwriters c. What is the process to cancel the life insurance portion on your Super d. Life insurance on the Super dilutes the investment portion. Did you see a significant difference in the % Super capital growth, say over the year before and after you changed it. Quote Link to comment Share on other sites More sharing options...
rozellem Posted August 26, 2016 Report Share Posted August 26, 2016 Following..... Quote Link to comment Share on other sites More sharing options...
Mara Posted August 26, 2016 Report Share Posted August 26, 2016 @ottg The idea of taking out insurance with your super is that you salary sacrifice the amount of the insurance that you wish to take out, then it DOES NOT, dilute your super..... easy reckoning! 2 Quote Link to comment Share on other sites More sharing options...
ottg Posted August 27, 2016 Author Report Share Posted August 27, 2016 @Mara Thx - you have put me on the right track here. After some homework I have noted that life Insurance outside Super is not tax deductible for employees but it is for a self-employed business owners as an expense. However the income protection portion of life Insurance outside a Super is tax deductible. Here is a general quantitative example for inside and outside your Super. See P3-4 http://www.onepath.com.au/public/adviser_advantage_pdfs/TB27.pdf What I have "heard" is that life insurance outside the Super is offered cheaper by underwriters than when inside your Super. So there may be a preemie added which negate the salary sacrifice benefits. Conflicting reports says again it should be cheaper through large Super funds because group super funds purchase insurance policies in bulk. https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/insurance-through-super A concern is the commission structure of advisers and whose interests do they serve. See ASIC report. P 45; P50. Also see P 57 Par 229 and table on P68 http://download.asic.gov.au/media/2012616/rep413-published-9-october-2014.pdf Again the question is it better inside or outside the Super for an employee. What is true and how big is this difference? How will this be different in a SMSF? Super funds increased pricing by 14 per cent average, while retail prices increased by an average of just one per cent but Super still remain cheaper due to retail insurance commission structures! https://ricewarner.com/wp-content/uploads/2015/10/Professional-Planner_Group-vs-life-article.pdf What are you insuring (e.g. life, income and/or illness) and what if I only need life & illness - can I separate that out in my Super? Yes you can. Perhaps I have answered my own concerns! Life Insurance inside Super is better and salary sacrifice the difference. Quote Link to comment Share on other sites More sharing options...
Mara Posted August 27, 2016 Report Share Posted August 27, 2016 My husbands monthly insurance premium went from $490 (approx outside Super) down to $360 (inside super) per month when we changed. The only thing you have to remember, is that it is not just good enough to nominate your beneficiary, you have to ensure that you complete an enduring nomination of beneficiary/ies, which is valid for three years. The difference in the life insurance paying out is that with a private insurance it pays to your beneficiary directly and if you take it out with your super, then it will pay to the super and they will pay you. I need to mention that my information stems from our dealings with Australian Super, which is an industry fund. I have no idea what the rules are for non-industry funds. 1 Quote Link to comment Share on other sites More sharing options...
rozellem Posted August 27, 2016 Report Share Posted August 27, 2016 https://www.wapu.org.au/wapu-media/news/432-please-please-get-a-will.html I read this with interest yesterday, since we recently got ourselves a will and sorting my life insurance in the next few weeks. 1 Quote Link to comment Share on other sites More sharing options...
ottg Posted August 28, 2016 Author Report Share Posted August 28, 2016 @rozellem Great reminder to get that in order - thx What is the easiest way for a simple & effective Will: online DIY kit, will kit via Super, attorney? Quote Link to comment Share on other sites More sharing options...
ottg Posted August 28, 2016 Author Report Share Posted August 28, 2016 @TiermelkHere you mentioned that insurance is cheaper via a broker for me than it was in my Super fund. Can you elaborate on this and what was your findings! Quote Link to comment Share on other sites More sharing options...
rozellem Posted August 28, 2016 Report Share Posted August 28, 2016 @ottg, we used this gov service. When we did it it was free, but they were telling us it would go up to $300, soon after we got ours. http://www.tag.nsw.gov.au/make-a-will.html 1 Quote Link to comment Share on other sites More sharing options...
Tiermelk Posted August 30, 2016 Report Share Posted August 30, 2016 On 8/28/2016 at 6:39 PM, rozellem said: @ottg, we used this gov service. When we did it it was free, but they were telling us it would go up to $300, soon after we got ours. http://www.tag.nsw.gov.au/make-a-will.html They`re now charging around $400 for the lot. Lawyers charge from around $1500 to who knows. But I have read of lots of people having issues with TAG when it comes to execution of the will. Quote Link to comment Share on other sites More sharing options...
Tiermelk Posted August 30, 2016 Report Share Posted August 30, 2016 On 8/28/2016 at 6:22 PM, ottg said: @TiermelkHere you mentioned that insurance is cheaper via a broker for me than it was in my Super fund. Can you elaborate on this and what was your findings! I just got insurance for myself through a broker underwritten by AIA. This was about 30% cheaper than I could do in Super. Also "group" insurance in Super is not the same as retail/individual insurance. Nice write up here: http://www.wealthsmart.com.au/2015/01/comparison-superannuation-v-retail-life-cover/ ""When signing up to a super fund, you will most likely be given the option to purchase a ‘group’ Life Insurance policy. This insurance is not underwritten, meaning that your personal history is not taken into account and accepted at application which can lead to complications at claim time. With a group Life Insurance policy, you are not in control of the levels of cover, and the terms and conditions can change at any time without your agreement. Pricing of group insurance is not based on you as the individual; it is based upon what is set at a policy level and dependent on the Group. Group insurance is quite often perceived as the cheap option."" But then my wife`s final "quote" came back 100% more because of a family medical condition. So I am investigating group insurance for her, TPD and life only. From my understanding Income protection insurance in group cover is always any occupation while you can choose own occupation with retail insurance. On 8/26/2016 at 7:21 PM, ottg said: Would like to know from those forum members who has their Aus life insurance separate from their Super: a. Who did you select and why b. Who are the underwriters c. What is the process to cancel the life insurance portion on your Super AIA. AIA was offered by 3 Insurance salesmen and TAL by one. Pricing was similar but also about 30% cheaper than online and Super insurance calculators. Although as mentioned above this is not the case for my wife. So I think if you don`t have health issues and no serious family health issues retail insurance is cheaper and better. If for some reason your risk may be higher group cover could be a better overall solution but retail insurance will always be better as the risk is assessed at the start of the policy. Just contact your Super fund to cancel, had to sign a page and send it back to them. Quote Link to comment Share on other sites More sharing options...
ottg Posted August 30, 2016 Author Report Share Posted August 30, 2016 Thank you @Tiermelk for your comprehensive reply. 1 Quote Link to comment Share on other sites More sharing options...
Riekie Posted August 31, 2016 Report Share Posted August 31, 2016 We're in the process of re-assessing our life insurance so it would be very interesting to see all the responses. Quote Link to comment Share on other sites More sharing options...
dlmonnink Posted September 8, 2016 Report Share Posted September 8, 2016 I got a life insurance quote through an external company which came to $90 a month for $1mil life cover, $100k disability, and no job loss cover. I got life insurance through my super for $25 a week (depending on the month it could then be $100-$125 a month) for $1mil life cover, $1mil disability, and $7500 job loss cover. 2 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.