AustralianSuper - Pre-mixed Balanced Super Fund Offer
- 2019 Finder Awards Winner: Best Super Fund - Balanced
- Join and consolidate your super with the easy-to-use mobile app
- Australia's best performing growth fund over 10 years*
You may of heard about people using their superannuation fund to get income protection. In fact, most superannuation funds have an arrangement where salary continuance is automatically included unless you 'opt-out'. While this isn't a recent development, many people find it confusing understanding how super income protection differs from a policy on its own.
While ditching your super income protection will mean you avoid fees and have a greater super balance, there are some drawbacks. We recommend:
Income protection insurance makes a lot of sense for certain people. If you're in any of the following situations, you should consider leaving your super income protection insurance right where it is:
Some of the key differences between the two types of cover include:
AustralianSuper - Pre-mixed Balanced Super Fund Offer
*Past performance data is for the period ending December 2018.
Disclaimer: Performance, fees and insurance data is based on each fund's default MySuper product. Where the performance, fees and insurance data for the MySuper fund vary according to the member's age, results for individuals between 40-49 years of age have been shown. This article is general advice. You should consider your own personal circumstances before deciding if a superannuation product is right for you. Superannuation is a long term investment and past performance is not indicative of future performance.
This depends on personal circumstances. If you are after an affordable option that has less flexibility than a standalone policy, then superannuation income protection can be the right choice for you.
We took a quick look at the type of income cover that's offered inside super funds and outside super funds.
|Superfund||Waiting periods offered||Maximum cover offered*||Breakdown|
|Hostplus – Balanced||30, 60, 90 days||90% of income capped at $30,000 per month||15% goes to super, 75% is income replacement|
|Cbus – Growth (Cbus MySuper)||30, 90 days||Up to 85% of income capped at $9,600 per month||10% goes to super, 75% is income replacement|
|AustralianSuper – Balanced||30, 60 days||Up to 85% of income capped at $30,000 per month||10% goes to super, 75% is income replacement|
|UniSuper Accum (1) – Balanced||30, 60, 90 days||Up to 85% of income capped at $29,900 per month||15% goes to super, 75% is income replacement|
|CareSuper – Balanced||30, 60, 90 days||Up to 85% of income capped at $40,000 per month||10% goes to super, 75% is income replacement|
|Non-super cover||Waiting periods offered||Maximum cover offered*||Breakdown|
|TAL Accelerated Protection Premier Plan||Up to 75% of income capped at $60,000 per month||75% is income replacement.|
|Clearview Income Protection||Up to 75% of income capped at $40,000 per month||75% is income replacement|
Information last checked as accurate September 2017. *Maximum benefit limits are offered based on various policy conditions. Always check with the insurer or superfund to find out what your maximum cover is.
The Australian Financial Reviews' 2016 Blue Ribbon Awards uncovered the top income protection policies in Australia. Key focus areas included: balance of features and pricing as well as a flexible policy that accommodates to the policy holder.
|OnePath OneCare||Best policy||Very clear definitions on disabilities with competitive pricing. Widest range of options on policies that were compared. Some features include waiting periods from 14 days to 2 years and a booster option.|
|TAL Accelerated Protection||Highly commendable||Premiums are waived when total disability benefits are being paid.|
|Comminsure Income Care Plus||Highly commendable||Tailor cover with options such as rehabilitation benefits and unemployment loan repayment benefits.|
Some super funds will automatically provide a default level of income cover when you sign up. For example, if you join Australian Super you receive automatic death, TPD and income protection insurance, with the premiums being deducted from your super account.
If you aren’t sure whether you have income protection cover or what level of cover you might have, the best thing to do is to read your product disclosure statement (PDS), which lays out the details of your super account.. This document will usually be provided to you by your super fund when you apply.
If you can't find your PDS check your funds website, it will generally be available there, or contact your provider directly and talk to a customer service representative.
For most of us, our ability to earn an income is our most valuable asset, which is why it’s so important to have income protection insurance. But whether it is held inside or outside superannuation can have a significant impact on its value.
If you're not satisfied with the level of cover provided from your super funds income protection policy, the option exists to get income protection cover from a life insurance company while still funding the premiums with your super funds. This is known as a superannuation rollover
An insurance adviser can help you find and compare different rollover options currently available.
In Australia, the premiums you pay for income protection insurance are normally tax-deductible when held outside super. When held inside super you won't be able to claim a direct tax-deduction, however you can receive a tax benefit when you contribute pre-tax income towards your super. When you contribute pre-tax income, you are taxed at 15% (as opposed to your marginal rate).
Note, the circumstances that dictate how much you can claim include:
If your income protection insurance is held inside super and you don’t believe the benefit amount will adequately cover your needs, it’s possible to change or increase your level of cover.
To demonstrate how this works, conditions relating to increasing cover for Australian Super's income protection policy are pinned below:
To receive a benefit payment from income protection insurance held inside super, you will need to satisfy both:
While definitions vary between insurers, partial disability normally means that:
If the insurer determines that you are partially disabled according to criteria such as these, your benefit will then be released to the trustee of your super fund. The benefit amount is calculated based on your pre-disability income, which is your income over the 12 months immediately prior to you becoming incapacitated. Normally, 100% of this amount will be paid.
A superannuation's condition of release is usually when the policy holder meets the definition for ‘temporary incapacity’. According to this condition, you must have:
If you satisfy such a condition, the trustee will then pay the benefit to you, generally for a period of up to two years. If you fail to satisfy a condition of release, the benefit will be retained in the fund.
There are two types of income protection benefit amounts:
While an agreed value policy benefits you by paying the agreed benefit amount even if your salary is reduced after taking out your income protection cover, it does have certain drawbacks you should be aware of:
Given these factors, an agreed value policy may be more beneficial to someone with a fluctuating income, such as a self-employed person, while an indemnity value policy would better suit those with a reliable regular income.
Yes, in most circumstances you will find the level of cover offered by income protection insurance held inside or outside super differs in the following ways:
Deciding whether to have income protection insurance inside your superannuation or as a standalone policy will depend on your individual needs and circumstances. Just some of the factors to consider when weighing up which option is more suitable include:
Weighing up all the pros and cons of income protection through super against your personal circumstances can be complicated. You can make a secure enquiry to receive a quote for cover or find out more by entering your details in the form above.
* The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.
finder.com.au is one of Australia's leading comparison websites. We compare from a wide set of major banks, insurers and product issuers.
finder.com.au has access to track details from the product issuers listed on our sites. Although we provide information on the products offered by a wide range of issuers, we don't cover every available product. You should consider whether the products featured on our site are appropriate for your needs and seek independent advice if you have any questions.
Products marked as 'Promoted' or "Advertisement" are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options and find the best option for you.
The identification of a group of products, as 'Top' or 'Best' is a reflection of user preferences based on current website data. On a regular basis, analytics drive the creation of a list of popular products. Where these products are grouped, they appear in no particular order.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment.
We try to take an open and transparent approach and provide a broad based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labelling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
Providing or obtaining an estimated insurance quote through us does not guarantee you can get the insurance. Acceptance by insurance companies is based on things like occupation, health and lifestyle. By providing you with the ability to apply for a credit card or loan we are not guaranteeing that your application will be approved. Your application for credit products is subject to the Provider's terms and conditions as well as their application and lending criteria.