Protect my Family
Purchase Life, Total and Permanent Disability (‘TPD’) and Income Protection (‘IP’) via Super
You can eliminate debt on death and disability and maintain your family’s lifestyle by funding covers in or out of super.
Trauma or Critical Illness covers can’t generally be held within super, but we can link them with your super to minimise the stamp duty you would pay otherwise.
How much cover do I need?
We work out for you how much cover your really need. An important part of our advice to you.
In the event that the unthinkable happens, your family can pay its debts and use the remaining payout to generate an ongoing income.
Cashflow and Tax Benefits from Insurance Via Super
Many families appreciate having insurance paid from their super. It frees up their cash to fund their lifestyles and/or to pay off their inefficient debt faster.
Their also are major tax benefits to funding your insurance via super.
If you’re eligible to make salary sacrifice contributions
You may be able to purchase insurance through a super fund with pre-tax dollars (see case study).
If you earn less than $49,489 pa, of which 10% is from eligible employment or carrying on a business and you make personal after-tax super contributions
You may be eligible to receive a Government co-contribution that could help you cover the cost of insurance.
If you make super contributions on behalf of a low-income spouse
You may be able to claim a tax offset of up to $540 pa that could be put towards insurance premiums for you or your spouse.
If you earn less than 10% of your income from eligible employment (eg you’re self-employed or not employed)
you can generally claim your super contributions as a tax deduction – regardless of whether they are used in the fund to purchase investments or insurance.
These tax concessions can make it cheaper to insure through a super fund, or enable you to purchase a higher level of cover.
Also, due to a recent change in legislation, if you purchase life cover through a super find, your dependants for tax purposes (such as spouse or young child) can now receive unlimited tax-free lump sum payments in the event of your death
This change has made it more attractive to hold larger life insurance policies within the superannuation system.
Note: Lump sum tax may be payable when a death benefit is received by a non-dependant for tax purposes (eg an adult child), or a TPD benefit is received by a disabled fund member. However, to compensate for the potential tax liability, you could consider taking out a higher level of insurance. While this will generally increase the premiums, the after-tax cost may still be lower than insuring outside super, when you take into account the upfront tax concessions
To find out if a strategy like this will help you, please book a meeting.