Can You Have Life Insurance in SMSF?
- Be a member of an SMSF.
- The policy must be held by the SMSF on behalf of the member (sometimes referred to as “owned by the SMSF”).
- Ensure the policy adheres to the rules and regulations set by the Australian Taxation Office (ATO).
Do You Need Life Insurance for Your SMSF?
- Protecting Your Loved Ones: If you have dependents who rely on your income, life insurance can provide financial support to your family in the event of your passing.
- Paying Off Debts: Life insurance can help cover outstanding debts, such as mortgages or loans, preventing your loved ones from inheriting financial burdens.
- Estate Planning: If you have specific plans for your estate, life insurance can assist in ensuring your assets are distributed according to your wishes.
- Business Owners: For SMSF members who are business owners, life insurance can help secure the business’s future and provide funds for buy-sell agreements.
Checking Insurance Cover in Your Super
- Using one of the many online calculators to assess the level of cover suitable to you.
- Reviewing the policy previously selected for suitability and cost. SMSF Insurance may be able to assist with this.
How to Find Out If Someone Has Life Insurance in Australia
- Superannuation statements: Review the annual superannuation statements, which often detail the insurance coverage within the fund.
- Reviewing the documented investment strategy of the SMSF kept by the trustee/s of the SMSF. Insurance consideration and review forms part of the trustees obligations and should be documented.
- Contacting the super fund provider if you can identify one: Reach out to the super fund provider and inquire about the insurance coverage.