Fund your life insurance via superannuation with AMP Elevate Super Life Cover
Life insurance and superannuation are probably two of the most commonly neglected financial planning products. However, together they can form a strong partnership, propelling you towards the future you and your family have always dreamed of, even if the worst should happen. With the AMP Elevate Life Insurance Superannuation, both of these products can be looked after by the one provider, in the one account.
Holding your life insurance policy within your superannuation account is a unique solution to your future financial plans but this option is not for everyone, it all depends on your circumstances. It is important to consider your personal situation and goals before taking out life insurance within a super account, as it can attract significant fees and waiting periods in some instances.
How does it work?
You can purchase life insurance with an AMP superannuation account, as an individual, a company, the trustee of a self managed super fund, or as a trust. If you take out AMP Elevate Life Insurance Superannuation for your self managed super fund, the trustees of the fund are responsible for meeting the requirements under the Superannuation Industry (Supervision) Act 1993.
One of the important differences you will notice between a stand alone life insurance plan, and one held within a superannuation account, is that when a claim is paid, it is paid to the super fund, who then releases the benefit to your beneficiaries once they have satisfied the conditions of superannuation law.
How are my premiums paid?
Another difference you will notice is that you don’t have to tangibly pay the premiums for your life insurance if the policy is held within a superannuation account. Instead, the premiums are paid from your superannuation balance, and AMP Elevate Life Insurance Superannuation allows you to structure those premiums in one of three ways:
- Stepped Premiums: A stepped premium increases each year at the renewal date of your policy. The premiums start out low, and as you get older they rise.
- Blended Premiums: For the first 10 years you hold your life insurance policy in your super account, the premiums are adjusted according to your age. After the first 10 years, the premiums then remain the same, and then once you turn 60 years old, the premiums change to stepped premiums.
- Level Premiums: Level premiums stay the same each year of your policy, and will change to stepped premiums after you are 70 years old.
You can then choose to purchase your insurance within your super as a plan, or as an option, for example:
- Insurance as a plan within superannuation. Your life insurance can be purchased as a plan that operates independently of any other insurances you may hold with APM, such as total and permanent disability insurance, trauma insurance or income insurance. With your insurances as independent plans, if you make a claim on your TPD or trauma insurance, the benefit of your life insurance plan is not reduced.
- Insurance as an option within superannuation. Alternatively, you can purchase TPD insurance or trauma insurance as an option attached to your life insurance. This means that if you make a claim on your TPD or trauma insurance, the benefit of the plan and any other insurance options are reduced by the amount of the claim. However, insurance taken out as an option does attract a lower premium.
Features of AMP Elevate Life Insurance Superannuation
Life insurance can only be purchased as a plan, but you can tailor your cover by adding other insurance plans or other insurances as options. The AMP Elevate Life Insurance Plan within your superannuation pays a lump sum benefit if you die or are diagnosed with a terminal illness with less than 12 months to live. You can apply for the following levels of life insurance cover:
- No benefit limit. The minimum life insurance benefit amount you can apply for is $50,000. After that, you can choose any maximum benefit amount, subject to the underwriting, according to your lifestyle and circumstances.
- Expiry of cover. Your life insurance cover within your super account will expire when you reach 75 years old, unless you have specified for an earlier expiry. Alternatively your cover may cease when you are no longer able to make super contributions, unless you have sufficient funds in your super account to continue to cover the premiums. Life insurance with AMP outside of a super account expires when you are 99 years old.
- Choice of premiums. You can apply for life insurance with stepped premiums if you are 11 to 70 years old, level premiums if you are 11 to 65 years old, and blended premiums if you are 25 to 55 years old.
- Life insurance benefit. When you die, your AMP Elevate Life Insurance Superannuation pays a lump sum benefit to your nominated beneficiaries. The benefit will only be paid once, and the benefit amount is outlined in your policy documents.
- Terminal illness benefit. If you become terminally ill, your APM life insurance will also pay a lump sum benefit of the full life insured amount. To be determined as terminally ill, it must be certified by two medical practitioners, and the result must be likely that you will die within 12 months. At least one of the medical practitioners must be a specialist in the area relating to your illness or injury. If a terminal illness benefit is eligible, it will be paid to the trustee of the account, and released when you have satisfied the conditions.
- Accommodation benefit. If you make an eligible claim for the terminal illness benefit on your life insurance, and a medical practitioner has determined that you must remain confined to bed, in a place that is more than 100 km from your home, the accommodation costs for an immediate family member to stay with you can be covered by your AMP insurance. The maximum amount covered by the accommodation benefit is $150 per day for each day that you remain confined to bed, for a maximum of 14 days. This benefit must be claimed within six weeks of when the terminal illness benefit is paid.
- Funeral expenses advance. An advance of $20,000 or the life insurance benefit amount – whichever is lower – will be paid when a successful claim is made. The advance can help to cover funeral expenses or final medical bills, before the full amount of the benefit has been processed and paid. When the full benefit amount is paid, it is paid less the amount of the advance.