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Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....
Did you know you can save money by buying your personal insurance in super? This is because super can offer cash flow and tax benefits.
Most super funds offer insurance that can help you, or your dependants, to pay off debt and replace your income if the unexpected was to happen. This includes life, total and permanent disability (TPD) and income protection insurance.
When you insure through super, the premiums are deducted from your super balance. This means you can arrange the cover you need without having to pay the premiums from your ‘after tax’ cash flows.
If you are using super to fund insurance, another consideration is that you will ultimately be utilising funds that are expected to meet your living expenses in retirement. Whilst this could make a difference to your retirement, it’s important to think of what could happen to your family’s lifestyle in the meantime if you don’t have insurance.
Insurance through super can be complex but beneficial in the right circumstances.
How Can I Make It More Affordable?
If you or your family faced financial difficulty you could run out of savings very quickly, well before your intended retirement date. So insuring in super could be a great solution if you don’t have sufficient cashflow to pay for the premiums outside super.
On the other hand, these insurances can be purchased outside of your super. However, apart from income protection insurance, there are no tax concessions for life and TPD (total and permanent disability) and you have to fund it from your existing cash flows.
Even if you think you could pay the premiums outside super, there are still cost effective benefits of insuring inside super. This is because if you make super contributions, there are some tax concessions, regardless of whether the contributions are used to buy insurance or investments. For example:
There are many considerations when deciding if purchasing personal insurance through super is the right move for you. We encourage you to talk to your Altus Adviser to determine if this will benefit your circumstances.
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Altus Wealth Pty Limited ABN 55 649 956 212 is an Authorised Representative of Altus Financial Services Pty Ltd ABN 24 637 026 825 an Australian Financial Services Licensee (AFSL no. 520266). Altus Financial Services Pty Ltd is not responsible for the advice, products and services provided by Altus Accounting. Julie Azzi is a credit representative (CR No. 366834) of BLSSA Pty Ltd ABN 69 117 651 760 (Australian Credit Licence 391237).
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