In this guide
Nobody likes to think about their death, but it’s important to consider what would happen to your family and financial dependents if you pass away.
Having good insurance cover in place can make a big difference to their future lifestyle and sense of security if the worst happens. Otherwise, your family may struggle to pay off your debts or to continue enjoying their current standard of living.
An easy way to organise this protection is by holding life insurance (or death cover) through your super, as most funds offer insurance as part of the suite of benefits they provide to their members. To make things even easier, your regular premiums are paid directly from your super account balance.
So, how much cover is enough?
What is life insurance (or death cover)?
Life (or term life) insurance is usually referred to as death cover by super funds.
Death cover pays a lump sum if you pass away, but many policies will payout early if you’re diagnosed with a terminal illness. The proceeds are added to your super balance.
If you die, the trustee of your super fund is responsible for paying your benefits directly to your beneficiaries and/or your estate. To be sure the payment goes to the person (or people) you prefer, you need to make an effective beneficiary nomination. Without a binding nomination, the decision about how your benefits will be distributed is up to the trustee.
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