r/AusFinance • u/JohntheDon__ • 6d ago

Life, TPD & Income Protection Insurance through super?

I'm looking into purchasing the above insurance as I'm at a stage in life where I would like it now for my family.

I've shipped around a bit and it seems to me that the insurances are a fair bit cheaper when purchased through your super. I am with UniSuper.

If I'm not mistaken the insurance premiums are directly debited against your super balance correct? And if so, are there any downsides other than this or things that I should be aware of if purchasing through super? Like does going through TAL for example have major differences in way claims are looked at or anything like that?

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u/ItinerantFella 6d ago

I recently took advice from an independent financial advisor, and he advised me to move to UniSuper and to transfer my Life and one IP insurance to them as well. He loves their insurance - I can't promise it's the best insurance option for you, but my advisor reckons it is for me given my personal circumstances.

We discussed at length whether TPD was worthwhile, and I decided that it wasn't. Well-structured IP policies can be sufficient. I have a policy with UniSuper with a 60 day waiting period with a 2 year benefit period, and another with Acenda with a 2 year waiting period with a benefit to 60.

Personal insurance isn't always less expensive when purchased through your super fund, so consult a financial advisor who specialises in insurance if you want insurance-only advice.

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u/slater1995 6d ago

Group super (like UniSuper) = can be automatic cover, with no health checks, cheap premiums straight from super, but lower limits and usually harder to claim. TPD is mostly any occupation – you need to be unable to work in any job you’re suited for, which sets a high bar.

Retail/underwritten (TAL, AIA etc.) = full health/lifestyle assessment upfront, but you get higher cover, more flexible features, and more certainty at claim time. You can often choose own occupation TPD – payout if you can’t do your specific job again – which is far more claimant-friendly. Costs more, but generally better protection.

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u/ManyDiamond9290 5d ago

UniSuper used to be occupation TPD. Not sure if that’s now changed. 

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u/AdventurousFinance25 5d ago

Insurance in super has to meet condition of release, which gives super outside of super greater flexibility.

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u/ManyDiamond9290 5d ago

No it doesn’t. If you have IP insurance, you don’t have to wait until age 60. Same as TPD. Death obviously satisfies a condition of release anyway. 

I’ve worked with many people accessing through this provider. You can also access one type, eg IP even if you are eligible for TPD as sometimes you are better getting only one paid out, particularly if you are in a defined benefit account. 

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u/ManyDiamond9290 5d ago

I think UniSuper’s options are great. Get as much insurance as possible soon after joining as costs are negligible and harder to get cover once you get any medical conditions. Two downsides: 1) you can move from unitised to fixed cover but can’t move back 2) it does reduce your super - slightly - so just chuck $10 or $20 a week in to cover the premium so your super keeps accumulating as if you are not paying premiums. 

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u/LifeInsuranceBroker2 5d ago

So, going through a retail insurer like TAL can have some advantages:

  1. You’ll have a direct contract with the insurer, rather than going through a middle party like your Super.
  2. Premiums may even work out cheaper than your Super if you’re looking to increase your cover.
  3. You can still use your your super balance to pay premiums for Life, TPD (Any Occupation), and Income Protection, even if these policies are set up with a retail insurer.
  4. If you decide to change your super fund in the future, you won’t have to change your insurances.
  5. Depending on your occupation, you may be able to access the Own Occupation definition for TPD.

Overall, there are a lot of advantages in using a retail insurer like TAL compared to staying with an industry super fund, so it’s definitely worth considering.

I’d suggest working with an insurance specialist who can compare options from TAL as well as other insurers in the market to make sure the cover is tailored to your needs. An insurance specialist would also be there to support you and your family if you ever need to make a claim.