Life insurance plays a crucial role in safeguarding the financial future of individuals and their loved ones. When it comes to managing your retirement savings within a Self-Managed Super Fund (SMSF), understanding the role of life insurance is equally important. In this blog post, we’ll explore the ins and outs of life insurance within SMSFs and answer some common questions that many Australians have.

Can You Have Life Insurance in SMSF?

One of the first questions people often ask is whether it’s possible to have life insurance in their SMSF. The answer is yes. SMSF members are allowed to include life insurance as part of their superannuation strategy, provided certain conditions are met. To be eligible, you must:
  • 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).
Including life insurance in your SMSF can have several advantages. It allows you to use your super funds to pay for the insurance premiums, potentially reducing the financial burden on your regular income.

Do You Need Life Insurance for Your SMSF?

The decision to include life insurance in your SMSF depends on various factors, including your individual circumstances, financial goals, and family situation. Here are some scenarios where having life insurance in your SMSF can be particularly beneficial:
  1. 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.
  2. Paying Off Debts: Life insurance can help cover outstanding debts, such as mortgages or loans, preventing your loved ones from inheriting financial burdens.
  3. Estate Planning: If you have specific plans for your estate, life insurance can assist in ensuring your assets are distributed according to your wishes.
  4. 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.
Assessing the life insurance needs of members is one of the trustees obligations as part of developing and regularly reviewing the SMSF’s investment strategy.

Checking Insurance Cover in Your Super

If you already have death cover within your super fund or are considering adding it, it’s essential to review your insurance coverage periodically. You can do this by:
Regularly reviewing and adjusting your insurance coverage ensures that you are adequately protected and that your SMSF strategy remains in line with your financial goals. Reviewing your insurance as part of your investment strategy is a trustees obligations under the relevant ATO rules.

How to Find Out If Someone Has Life Insurance in Australia

For many Australians, they may need to find our whether their loved ones have life insurance. You can find out if someone has life insurance in Australia by checking:
  • 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.
Ensuring transparency in financial planning and discussions with family members is vital, as it helps everyone make informed decisions regarding their future financial security.


In summary, life insurance within an SMSF is a valuable tool for securing your financial future and providing for your loved ones. By understanding the eligibility criteria, assessing your needs, and reviewing your coverage regularly, you can make informed decisions about including life insurance in your SMSF, and satisfy trustees legal obligations.
As with any financial decision, you may need to seek advice on your insurance strategy to suit your unique circumstances. Your SMSF’s insurance coverage should align with your long-term financial goals and provide peace of mind for you and your family.

For more information on SMSF life insurance, income protection, and TPD insurance, visit SMSF Insurance, SMSF Income Protection, and SMSF TPD Insurance.

Get a Quote

Quotes for SMSF Life Insurance are instant, and you can buy SMSF Life cover securely online.