Think your super is just for retirement, think again!

Many people assume their superannuation fund is only there to prepare them for retirement, but this isn’t always the case. Most super funds also offer insurance, such as income protection, total and permanent disability (TPD) or life insurance. As the National Head of Superannuation and Insurance Claims at Maurice Blackburn Lawyers, I’ve come across many clients who didn’t even realise their super offered cover.

If you fall into this category, allow me to give you a crash course on super insurance.

Depending on your superannuation fund, your cover may vary from basic life insurance to complete income protection and terminal illness benefits.

The three most common types of super cover include:

  • income protection – any lost income is covered for a certain period if you’re unable to work due to illness or disability
  • TPD – you are covered in the event you become seriously disabled and are unable to work again
  • life cover – your beneficiaries are paid a benefit in the event of your death.

If you’re unsure what insurance policy your super offers, you should speak to your provider to find out exactly what you are and aren't covered for. If you’re thinking about selecting a new super fund, speak with a financial planner first to make sure you’re making the right choice for your circumstances.

Be wary of default employer super funds


When you’re starting a new job, it’s important to research your employer's recommended super fund to make sure it offers an appropriate level of insurance. If it doesn't, you may be better off sticking with your existing fund instead of having multiple super accounts. You need to be aware that you have a choice when it comes to your super fund and you don’t have to go with the one used by your employer.

To put the weight of this decision into perspective for you: we had a client who worked in the mining industry on a fixed-term contract. He joined the default super fund suggested by his employer, but when he developed a serious back injury and couldn’t continue work, his TPD claim was denied.

This was because the insurance offered by his employer’s super didn’t cover fixed-term contracts, meaning he was never going to receive a benefit from his claim even though he was paying the insurance premiums. This is just one reason why it's important to read the fine print of your employer’s super policy before signing up.

If you’ve had four or five jobs in different industries, you may also have a number of funds. This can be hard to keep track of, as they may offer varying levels of insurance. You might want to consider rolling all of your funds into a single account so you only have to pay administration fees for one. Before you do, make sure you consider the pros and cons of consolidating your superannuation [Link to 'What to consider before consolidating your super'.

Benefits of being covered by your super


One of the main benefits of super insurance is that it’s not subject to individual medical checks to qualify. When you purchase retail insurance, for instance, you run the risk of being rejected because of a pre-existing illness or disability. However, when you receive super cover, any pre-existing conditions are usually covered.

Super insurance is also far cheaper than insurance purchased in the retail space, as super funds purchase insurance policies in bulk. If your policy only offers basic cover, you can purchase extra units of cover. But these may be subject to medical examinations to qualify.

What you need to consider when choosing your super

There are a few key things to consider before deciding which super insurance is suitable for you and your family. This includes your:

  • age
  • occupation
  • family situation
  • existing debt

If you have dependants who rely on your income, for example, and you work in a high-risk occupation, it’s crucial to find a level of insurance that can cover any loss of income as a result of an injury or accident. If the unthinkable happens and you die as a result of an accident, you also want to make sure your dependants are covered to manage any debt left behind, such as a mortgage.

Make sure you read the fine print

I’ve come across many situations where clients are covered by what is known as ‘junk insurance’ – policies that contain strict conditions in the fine print that dictate when they’ll pay out a benefit. For example, if you’re a casual who works less than 30 hours a week, you may see policy eligibility rules which state you won’t have TPD cover unless you meet what they term ‘active employment provision'.

This means you'll need medical evidence to prove you still had the capacity to work 30 hours or more if your illness or injury didn't prevent you from working the minimum 30 hours a week.

This speaks to the importance of having a lawyer to help you navigate such unpleasant processes. People going at it alone can be put off even making a claim when they don’t know their fund's eligibility rules. An experienced superannuation lawyer can help make all the difference, and give you peace of mind that your claim is in reliable hands.

Find out more about superannuation insurance cover today.

TOPIC: Superannuation
RELATED LEGAL SERVICES: Superannuation claims

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Kim Shaw

Maurice Blackburn Melbourne
Kim Shaw is an accredited personal injury specialist practising in superannuation and insurance claims in Maurice Blackburn’s Melbourne office. Kim has been with Maurice Blackburn since 1991 when she finished her articles, and she is very proud of her long association with the firm and their commitment to fighting for fair. Kim established Maurice Blackburn’s Ringwood office, and became a Principal in 1999. With over 20 years of experience representing people with WorkCover claims, Kim now focuses solely on superannuation and insurance claims. Because many people with super claims also have WorkCover claims, Kim’s wealth of knowledge means she can provide comprehensive and practical legal advice for her clients. Kim has represented clients in a wide range of superannuation and insurance matters, including: non-disclosure claims litigating TPD benefits ranging from $25,000 to over $1million advising in matters where there is no insurance due to a failure by employers to pay compulsory superannuation, and recovery of income protection benefits and death benefits. Kim has also provided advice to clients in general insurance matters including in flood and mould matters. She is determined to fight hard for her clients against unfair and unreasonable decisions made by insurers and super funds, and understands the significant financial pressure and strain brought about by an injury, unexpected illness or disability.  “I am passionate about helping people know their rights and ensure they are receiving their lawful entitlements at a time of significant disruption and anxiety in their lives," says Kim. Workplace injuries don’t only create problems with work and job security; they affect families and relationships and create financial pressure. Kim understands that, and finds being able to help with financial compensation incredibly satisfying. “Naturally, a fantastic outcome on a difficult case or a settlement however small or large for a struggling client is terrific. I recall one client saying ‘now we won’t lose our family home’ and I was blessed to be able to play a part in that for her.” Kim is a Victorian co-convenor of Maurice Blackburn’s Women’s Network, where she actively supports women’s rights. As a busy lawyer and mother of three boys, Kim hopes she can be an inspiration to other women. Alongside her work as a lawyer, Kim is the former author of the WorkCover chapter in the Legal Practice Manual published by Monash University Law Faculty. She is a current member of the Juris Doctor Advisory Board/RMIT, is current Chair of the Personal Injury Advisory Committee at the Law Institute of Victoria, and she is committed to continually educating herself and other lawyers, especially the next generation of practitioners. She believes that the best possible advice and advocacy should be provided, and to be able to do that, skills and knowledge must be current, practical and relevant. “I very much enjoy mentoring younger lawyers and love to see their skills develop. Playing a small part in that is a privilege I am grateful to share.” Memberships & accreditations Law Institute of Victoria’s Personal Injury Law Advisory Committee Member Australian Litigation Lawyers Alliance member RMIT Graduate School of Business and Law Juris Doctor Advisory Board member Maurice Blackburn's Women's Network co-convenor ...

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