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Life insurance within super: what you need to know

Life insurance is one of the best ways to protect yourself and those you care about most. This article is an overview of the life insurance offered by Australian Ethical Super.

 

25 August 2021

When you join Australian Ethical Super and meet the eligibility criteria, we offer built-in life insurance cover called ‘Default Cover’ which is made up of Death and Total and Permanent Disablement Cover (TPD). Default Cover is switched on automatically when you’re at least 25 years old (but under 65) and have reached a balance of at least $6,000 in your account. You can opt-in earlier if you want to - as long as you’re at least 15 years old and under 65.

The amount of cover you receive depends on your sex at birth and your age. Premiums are based on your age, sex at birth and occupation category. For many Australians, this is a simple and affordable way to have life insurance.  

It’s important to regularly check the insurance cover inside your super to make sure it meets your needs. For some people, purchasing a life insurance policy outside of super may be the preferred option.

What does Insurance inside super include?

We offer three distinct types of cover:

  • Death Cover (including Terminal Illness) which pays a lump sum to your beneficiaries if you die or if you have been diagnosed with a terminal illness
  • Total and Permanent Disability (TPD) Cover, which is for serious accidents or illness that permanently stop you from working
  • Income Protection (IP) Cover, which provides a regular payment during prolonged illness for a certain period of time, called a benefit period

Eligibility and other terms and conditions apply, so it’s important to read the Insurance Guide.

What are the benefits of Insurance inside super?

Depending on your circumstances, insurance inside super can be a great way to obtain cover. Insurance premiums are paid out of your super account at the end of each month from your pre-tax income.

In addition to this, Default Cover is not subject to medical screening. The only time that you need to provide us information about your health is if you are wanting to increase the amount of Default Cover (outside of New Member Offer or Life Events Cover) - this type of cover is typically called Fixed Cover. Also when you apply for IP Cover or if you previously cancelled your cover and require cover to start again.  

However, please note that for the first 30 days of your cover, you’re not covered for pre-existing conditions. After that, this restriction can be lifted if you meet all the necessary criteria outlined in the Default Cover section of the Insurance Guide.

If you don’t meet all these criteria, the limitations on your cover will continue to be restricted for at least 24 months. This is also explained in more detail in the Default Cover section of the Insurance Guide. At the time of making a claim, the Insurer may request information about your medical history.

How much cover do I need?

Everyone’s circumstances are unique. If the Default Cover offered is not enough or too much, you can consider changing it. It’s important to think carefully about how much cover you need and to review your policy when there’s changes in your life.

For example, young people who are renting and have no dependants may need less Death Cover than someone with a partner, children and a mortgage. 

By contrast, younger people may need more TPD cover than older people.

Remember, Death insurance is for those you leave behind so they don’t experience financial hardship. When choosing the amount of cover, some considerations are: 

  • Mortgage or other debts
  • Income to help support your spouse and other dependents; and
  • the upbringing of your children, including the cost of their education. 

For TPD insurance, consider:

  • Your potential medical treatment costs;
  • The cost of modifications needed for your home;
  • Debts; and
  • Basic living expenses for the rest of your life.

What’s next?

View your dashboard in the member portal to understand if you currently hold insurance within the fund. From there, consider your options about working out how much cover you need. You can apply to increase, reduce or cancel cover or make changes to your occupation category.

 

This is general information only and does not take account of your personal financial situation or needs. Consider its appropriateness to your circumstances and read the PDS and Insurance Guide. We recommend you speak with a licensed financial adviser to consider your insurance needs. Interests in the Australian Ethical Retail Superannuation Fund (ABN 49 633 667 743) (the ‘Fund’) are issued by Australian Ethical Superannuation Pty Ltd (ABN 43 079 259 733, RSE L0001441, ASFL 526 055).  Insurance through the Fund is provided by MetLife Insurance Limited (MetLife) ABN 75 004 274 882