Westpac Life Insurance Superannuation

Information verified correct on October 1st, 2016

Your Westpac Life Cover through Super

Many people think they don't need to worry about taking out a life insurance policy, because they have coverage through their super fund. While this is often true to an extent, life insurance through super can offer limited protection, and can be difficult for your family to navigate when it comes time to make a claim.

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Therefore, if you are looking for a simple yet comprehensive solution to your life insurance needs, the Westpac Term Life as Superannuation option might be the right mix for you.

Features of Westpac Life Insurance Superannuation

The Westpac Life Insurance Superannuation is a life insurance policy, which can help ensure your family can still enjoy the life you've dreamed of for them, even if you're not around. Westpac term life super is easy to apply for and customise, and includes the following features:

  • Death benefit: Is paid as a lump sum amount to your family when you die. This money can help them cover costs such as living expenses, repayments of mortgage or other debts, or your children's future education expenses.
  • Your benefit amount: You choose the benefit amount which would cover the debts and living expenses of your family if you were to die, balanced with the cost of the premiums which need to fit into your current family budget.
  • Loyalty benefits: For non-smokers, if you hold multiple policies or hold your policy for more than three years, you may be entitled to a discount.
  • Guaranteed renewable: Your policy will be automatically renewed with Westpac each year as long as your premiums are kept current, until you are 99 years old. This means you don't need to go through an application or worry about changes in your health or lifestyle affecting your premiums.
  • Automatic indexation: means your benefit increases by 3% each year, to keep in line with inflation and the cost of living.
  • Financial planning benefit: reimburses your family for up to $5,000 worth of expenses associated with preparations which need to be made for management of the benefit amount.
  • Funeral advancement benefit: pays 10% of the death benefit amount in advance, up to $25,000, so that your family can meet the immediate costs of your funeral.
  • Counselling benefit: reimburses your family for up to $5,000 worth of expenses for up to 10 counselling sessions after a successful claim has been made.

How the Westpac Term Life Insurance works with your Superannuation

An additional feature you can include in your Westpac term life super policy is coverage for total and permanent disability. This means you can receive a benefit payment if you are unable to work because of injury or illness, to maintain your lifestyle, and pay for your medical bills. Depending on the level of cover you want, you can choose:

  • Own occupation TPD: is when you are unable to work in your own occupation for a period of at least three months.
  • Any occupation TPD: is when your disability prevents you from working in any occupation for a period of at least three months.
  • TPD home duties: Where you are prevented from being able to carry out all of the normal household duties.
  • General cover TPD: Is defined as your loss of independence, or the loss of limbs or sight.
  • Super plus TPD: Maximises the benefits which are paid through your super by paying the own occupation portion of your premium through a non superannuation account, and the any occupation portion through your super fund.

Choosing Life Insurance Through Your Super

Splitting portions of your premiums to be paid through your super fund and non super accounts can give you the best of both worlds with the Westpac Life Insurance Superannuation policy. This is because, while there are benefits to managing your life insurance through your super, you need to carefully consider how the conditions of cover apply to your situation.

For example, life insurance through a super fund offers:

  • Cheaper coverage as policies are often bought in bulk by the fund, without individual risk factors affecting the costs.
  • Medical underwriting is not usually required on application or during the coverage period.
  • Premiums can be paid from your pre tax income through salary sacrifice.
  • Easy management as premiums are automatically deducted.

However, just remember, that having a life insurance policy solely through your super fund can mean:

  • You have limited coverage as the policy is not tailored to you individually.
  • Claims must be made through the super fund which can lead to payment being drawn out.
  • A binding beneficiary nomination must be made to guarantee they receive your insurance benefit.
  • Benefits paid to beneficiaries over 18 years could incur tax liability.

To determine whether Westpac term life as superannuation policy can strike the perfect balance between super fund insurance and stand alone policy, it is important to carefully read the Product Disclosure Statement (PDS) and weigh the options to you and your family's needs.

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