Understanding group insurance:

Through super, you are given the option of undertaking a ‘group’ insurance policy. This is underwritten at time of claim, meaning it is not tailored to you, does not take your personal circumstances into account, and may see you knocked back at claim time. These group options do not give you a choice regarding the amount you are insured for, which may see you significantly under insured, leaving you and your family financially exposed in the event of premature death/sickness or injury.

Retail insurance and its benefits:

As an alternative to group cover, you can purchase underwritten retail cover. This can be funded both through super, and outside of super. If through super, you benefit from the 15% tax rebate and this strategy can be used to preserve cash flow. This form of cover is assessed by an underwriting team who look at your medical history, your lifestyle, and your occupation. Exclusions or loadings may be added to your policy at time of application and by going through this process, you have confidence in knowing what you are and what you are not covered for. This surely beats getting a nasty shock at claim time, having your claim knocked back for a pre-existing condition, when you have been paying years of premiums.  Further, once in place, later health implications, lifestyle or occupation changes will not impact the cover you have.

Although this process can take longer and sometimes involves medical reports and blood tests, the certainty provided for yourself and your family is worth any slight inconvenience.
You do have a duty of disclosure when going through this underwriting process and in being open and honest, you have peace of mind that your claim will be paid out in your time of need.

If you require help with understanding what’s best for you, the team at Superannuation Advice Australia can help.  Contact us today!

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