)
insurances inside superannuation
It can also be beneficial to hold insurance via superannuation.
Insurance held via superannuation is owned by the Trustee of the super fund for the benefit of the insured member. The Trustee deducts the insurance premiums from either ongoing contributions or the account balance of the fund.
It is generally death, TPD and income protection that can be held in the super environment (not trauma cover). Also, the premiums for death, TPD and income protection insurances purchased through a superannuation fund are completely deductible to the fund. Furthermore, you can usually fund the insurance premiums via a tax-deductible superannuation contribution if you are self-employed, or out of your employer contributions made to your superannuation fund. Note that the tax treatment of an insurance policy should never be the primary reason for holding an insurance policy under a particular structure.
Insurance benefits can be paid out as either lump sums or pensions (or a combination of both) based on your (or your beneficiary’s) circumstances at the time. Insuring via superannuation can also assist with personal cash flow as the premiums are paid by the fund.