Why Isn’t Your Super Fund Paying for your Life Insurance?


Did you know that your super fund could help protect your family by paying for your Life Insurance?

Whether you’re an apprentice or a business owner, working in a trade can be risky business. Which begs the question: how important is your income in supporting the financial well-being of you and your family? When you have a family, debts, and a business to run, life insurance is a vital back-up plan for any tradesperson.

“45,600 Australians died of cardiovascular disease in 2011 – that’s one Australian every 12 minutes*”

With life insurance and disability insurance inside super, you may be able to use your before-tax income to pay your premiums – potentially reducing the overall cost of your life insurance by your marginal tax rate. 

There are primarily there core benefits to this strategy. Firstly, you can pay your insurance premiums conveniently straight from your super account in most cases you don’t even have to change your Superfund. Secondly,  It helps your cash flow because you’re spending your super, you don’t necessarily have to find additional money in the budget to fund your insurance premiums. Thirdly,  It is tax effective because the super environment offers a tax-effective way to hold insurance.

The primary purpose of life insurance is that it pays a lump sum if you die or are diagnosed with a terminal illness which can help to: 

  1. Pay for funeral Expenses 
  2. Cover your Children’s Expenses 
  3. Replace a Spouse’s Income 
  4. Pay Off your Debts 
  5. To Buy a Business Partner’s Shares 

These benefits stack up when you consider that a 40 year old male non-smoker can protect his family for a lump sum payment of $250,000  for as little as $5.50 a week. Taking this into consideration it is obvious to see that it is worth investigating further. 

Paul Pellegrino is a authorised representative of Tradie's Insurance who specialises in Life Insurance and would be happy to assist our Tradesure customer with a complimentary quote or chat about whether putting your insurance inside your Super is right for you.

*Heart Foundation