OnePath Life Insurance and Super Product Review.
Superannuation is one of those financial products that many of us take for granted. We assume that because our employers are making the contributions, it’s a required product, and the account is managed by the super fund, there’s not much more we need to do. However, there is a lot more you could be doing to make your super work harder for you, while at the same time making sure that your family’s future is protected as well as your own.
OnePath offers a OneCare Super Life Insurance product which combines your superannuation account with a life insurance policy, and also allows you to choose additional coverage such as total and permanent disability insurance, income protection insurance or OnePath’s Extra Care Cover product.
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What does the policy cover?
When a life insurance policy combines with a superannuation account, the super contributions which you make or which are made by your employer, are used to pay the premiums of the life insurance policy. With OneCare super you’re not getting an investment product, and there will not be an accumulation of a balance, instead the amount of your contribution will equally match the premiums paid on your OnePath life insurance policy.
Now consider how the features and benefits of a combined super and life insurance product with OnePath could benefit you:
- Salary sacrifice contributions: You may be able to make an arrangement with your employer, where they make an additional contribution to your superannuation fund, in place of the equivalent amount in your salary. The salary sacrificed portion of your super contributions may then be eligible for tax concessions, because if you are on a higher personal tax rate, you may be able to make savings on the tax you pay by receiving part of your remuneration as superannuation.
- Death benefit: If you die, the insurance benefits you are entitled to under your OneCare Super policy can be paid to a dependent or to your estate. For example, you can choose a dependent as the beneficiary of your death benefit who is, your spouse, your child, a person who is financially dependent on you at the time of your death, or a person with whom you have an interdependency relationship with.
- Choose your beneficiaries: You can nominate your beneficiaries with OnePath at any time, and you can change your choice of beneficiary by completing the Nomination of Beneficiaries form with OnePath. You should make sure you regularly revise your chosen beneficiaries as your nomination could become defective in certain events, for example marriage or divorce.
- Provide your beneficiaries an ongoing income: In most cases the death benefit from your OnePath OneCare Super Life Insurance policy will be paid as a lump sum amount. However, there may be instances where receiving the payout as an ongoing income stream could be more beneficial.
- Have benefits paid to you: You may be able to receive all or part of the benefits under your OneCare Super policy if you have met certain conditions. For example, you have reached the preservation age and have permanently retire, you have reached 60 years old and ceased gainful employment, you have reached 65 years old and are retired or still working, you are permanently or temporarily incapacitated, you are suffering financial hardship, or you have nominated compassionate grounds.
- Stepped or level premiums: You can choose for your premiums to be stepped, where the premium amount is based on your age and other lifestyle factors, and they will start out lower, and increase each year. Or you can choose level premiums which are averaged out over the life of the policy so you will start out with higher level premiums compared to stepped premiums, but will have comparatively lower premiums in later years.
- The cost of your premiums: The premiums on your OnePath OneCare Super Life Insurance policy are dependent on a number of factors with relation to your lifestyle and the options you choose in your account. For example, your premiums are calculated on your age, gender, smoking status, health and your occupation. Your premiums are not guaranteed at any point on either the stepped or level premium choices, but if OnePath changes their premium rates, you will receive at least 30 days notice, and the premium will not change until the next anniversary of your policy.
- Indexed cover: Your level of cover may also increase each year by the indexation factor which helps your benefit amount remain in line with the current costs of living, so the payout is relevant and valuable to your beneficiaries at the time of the claim.
- Choose your premium frequency: You can choose for your life insurance premiums to be paid monthly or annually from your super account. Where your premiums are paid monthly and you cancel your policy, you will not be eligible for a refund of any premiums paid. If your premiums are paid annually or half yearly you may be eligible for a pro rata refund.