Personal Insurance Ownership Structures

When taking out Term, TPD, Trauma or Income Protection Insurances, a very important consideration is who should be the owner of the policy. There are several alternatives as to this decision.  Depending on your individual circumstances we primarily recommend Self Ownership, Superannuation Ownership or SMSF Ownership. The details of these ownership structures are summarised in the table below:

Below are some of the more common scenarios you will see.


TPD Insurance and Ownership Structures

If you work in a qualified specialist occupation, we may recommend that your TPD cover have an “own occupation” definition. TPD with this definition cannot be held within a superannuation fund. However, most insurance companies now offer a “split” policy by which the life insured can hold a self-owned “own occupation” TPD policy  linked to a superannuation owned “any occupation” TPD policy.  In this case, approximately two thirds of the premium is paid from your superannuation fund and approximately one third of the premium is paid by you personally.


Income Protection and Ownership Structures

Although Income Protection cover is available to be held within a superannuation fund, we recommend that this type of cover is Self Owned. There are a number of reasons for this, firstly, in the event of a claim as you are dealing with both superannuation and insurance law, you cannot personally receive more than 100% of your pre-disability income from all sources. Secondly, you may not be able to access the portion of the monthly benefit paid into your super fund until retirement. Therefore, if you rely on this income to meet your ongoing cost of living, this may cause financial stress for you. Further to this, Income Protection policies held within a superannuation fund often provide very basic levels of cover as many ancillary benefits are not available under this ownership structure. Such unavailable benefits include rehabilitation benefits, an accommodation benefit, trauma benefits, specific injury benefits, a bed confinement benefit, etc.

General Advice Disclaimer

General advice warning: The advice provided is general advice only and in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.

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